Correlation Between Bce and VersaBank
Can any of the company-specific risk be diversified away by investing in both Bce and VersaBank at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Bce and VersaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bce Inc Pref and VersaBank, you can compare the effects of market volatilities on Bce and VersaBank and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Bce with a short position of VersaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bce and VersaBank.
Diversification Opportunities for Bce and VersaBank
Excellent diversification
The 3 months correlation between Bce and VersaBank is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bce Inc Pref and VersaBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VersaBank and Bce is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Bce Inc Pref are associated (or correlated) with VersaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VersaBank has no effect on the direction of Bce i.e., Bce and VersaBank go up and down completely randomly.
Pair Corralation between Bce and VersaBank
Assuming the 90 days trading horizon Bce is expected to generate 16.23 times less return on investment than VersaBank. But when comparing it to its historical volatility, Bce Inc Pref is 2.91 times less risky than VersaBank. It trades about 0.01 of its potential returns per unit of risk. VersaBank is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 976.00 in VersaBank on October 7, 2024 and sell it today you would earn a total of 1,004 from holding VersaBank or generate 102.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bce Inc Pref vs. VersaBank
Performance |
| Timeline |
| Bce Inc Pref |
| VersaBank |
Bce and VersaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bce and VersaBank
The main advantage of trading using opposite Bce and VersaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bce position performs unexpectedly, VersaBank can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VersaBank will offset losses from the drop in VersaBank's long position.The idea behind Bce Inc Pref and VersaBank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |