Correlation Between Bce and Alimentation Couchen
Can any of the company-specific risk be diversified away by investing in both Bce and Alimentation Couchen 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 Alimentation Couchen 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 Alimentation Couchen Tard, you can compare the effects of market volatilities on Bce and Alimentation Couchen 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 Alimentation Couchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bce and Alimentation Couchen.
Diversification Opportunities for Bce and Alimentation Couchen
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bce and Alimentation is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Bce Inc Pref and Alimentation Couchen Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couchen Tard 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 Alimentation Couchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couchen Tard has no effect on the direction of Bce i.e., Bce and Alimentation Couchen go up and down completely randomly.
Pair Corralation between Bce and Alimentation Couchen
Assuming the 90 days trading horizon Bce Inc Pref is expected to under-perform the Alimentation Couchen. But the preferred stock apears to be less risky and, when comparing its historical volatility, Bce Inc Pref is 1.9 times less risky than Alimentation Couchen. The preferred stock trades about -0.11 of its potential returns per unit of risk. The Alimentation Couchen Tard is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,569 in Alimentation Couchen Tard on September 12, 2024 and sell it today you would earn a total of 589.00 from holding Alimentation Couchen Tard or generate 7.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bce Inc Pref vs. Alimentation Couchen Tard
Performance |
| Timeline |
| Bce Inc Pref |
| Alimentation Couchen Tard |
Bce and Alimentation Couchen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bce and Alimentation Couchen
The main advantage of trading using opposite Bce and Alimentation Couchen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bce position performs unexpectedly, Alimentation Couchen 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 Alimentation Couchen will offset losses from the drop in Alimentation Couchen's long position.| Bce vs. Labrador Iron Ore | Bce vs. NeuPath Health | Bce vs. Vizsla Silver Corp | Bce vs. Reliq Health Technologies |
| Alimentation Couchen vs. Metro Inc | Alimentation Couchen vs. Dollarama | Alimentation Couchen vs. Nutrien | Alimentation Couchen vs. Canadian Pacific Railway |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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