Correlation Between Desjardins and Desjardins Canadian
Can any of the company-specific risk be diversified away by investing in both Desjardins and Desjardins Canadian 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 and Desjardins Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Desjardins RI Active and Desjardins Canadian Preferred, you can compare the effects of market volatilities on Desjardins and Desjardins Canadian 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 with a short position of Desjardins Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Desjardins and Desjardins Canadian.
Diversification Opportunities for Desjardins and Desjardins Canadian
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Desjardins and Desjardins is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Desjardins RI Active and Desjardins Canadian Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins Canadian and Desjardins 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 RI Active are associated (or correlated) with Desjardins Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins Canadian has no effect on the direction of Desjardins i.e., Desjardins and Desjardins Canadian go up and down completely randomly.
Pair Corralation between Desjardins and Desjardins Canadian
Assuming the 90 days trading horizon Desjardins RI Active is expected to generate 0.57 times more return on investment than Desjardins Canadian. However, Desjardins RI Active is 1.74 times less risky than Desjardins Canadian. It trades about 0.13 of its potential returns per unit of risk. Desjardins Canadian Preferred is currently generating about 0.0 per unit of risk. If you would invest 1,862 in Desjardins RI Active on August 30, 2024 and sell it today you would earn a total of 24.00 from holding Desjardins RI Active or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Desjardins RI Active vs. Desjardins Canadian Preferred
Performance |
| Timeline |
| Desjardins RI Active |
| Desjardins Canadian |
Desjardins and Desjardins Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Desjardins and Desjardins Canadian
The main advantage of trading using opposite Desjardins and Desjardins Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Desjardins position performs unexpectedly, Desjardins Canadian 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 Desjardins Canadian will offset losses from the drop in Desjardins Canadian's long position.| Desjardins vs. BMO Aggregate Bond | Desjardins vs. iShares Canadian Universe | Desjardins vs. BMO Core Plus | Desjardins vs. BMO Discount Bond |
| Desjardins Canadian vs. Desjardins Canadian Short | Desjardins Canadian vs. Desjardins Canadian Universe | Desjardins Canadian vs. Desjardins 1 5 Year | Desjardins Canadian vs. Desjardins 1 5 Year |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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