Correlation Between Desjardins Alt and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both Desjardins Alt and Picton Mahoney 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 Desjardins Alt and Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desjardins Alt LongShort and Picton Mahoney Fortified, you can compare the effects of market volatilities on Desjardins Alt and Picton Mahoney 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 Desjardins Alt with a short position of Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desjardins Alt and Picton Mahoney.
Diversification Opportunities for Desjardins Alt and Picton Mahoney
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Desjardins and Picton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Desjardins Alt LongShort and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified and Desjardins Alt 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 Desjardins Alt LongShort are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of Desjardins Alt i.e., Desjardins Alt and Picton Mahoney go up and down completely randomly.
Pair Corralation between Desjardins Alt and Picton Mahoney
Assuming the 90 days trading horizon Desjardins Alt is expected to generate 3.76 times less return on investment than Picton Mahoney. But when comparing it to its historical volatility, Desjardins Alt LongShort is 3.42 times less risky than Picton Mahoney. It trades about 0.27 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,506 in Picton Mahoney Fortified on September 1, 2024 and sell it today you would earn a total of 46.00 from holding Picton Mahoney Fortified or generate 3.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Desjardins Alt LongShort vs. Picton Mahoney Fortified
Performance |
| Timeline |
| Desjardins Alt LongShort |
| Picton Mahoney Fortified |
Desjardins Alt and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desjardins Alt and Picton Mahoney
The main advantage of trading using opposite Desjardins Alt and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desjardins Alt position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.| Desjardins Alt vs. AGFiQ Market Neutral | Desjardins Alt vs. Desjardins RI Canada | Desjardins Alt vs. NBI Liquid Alternatives | Desjardins Alt vs. Desjardins RI USA |
| Picton Mahoney vs. Brompton Global Dividend | Picton Mahoney vs. Global Healthcare Income | Picton Mahoney vs. Tech Leaders Income | Picton Mahoney vs. Brompton North American |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |