Correlation Between Dynamic Active and Desjardins
Can any of the company-specific risk be diversified away by investing in both Dynamic Active and Desjardins 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 Dynamic Active and Desjardins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynamic Active Global and Desjardins RI Global, you can compare the effects of market volatilities on Dynamic Active and Desjardins 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 Dynamic Active with a short position of Desjardins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynamic Active and Desjardins.
Diversification Opportunities for Dynamic Active and Desjardins
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dynamic and Desjardins is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Dynamic Active Global and Desjardins RI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins RI Global and Dynamic Active 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 Dynamic Active Global are associated (or correlated) with Desjardins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins RI Global has no effect on the direction of Dynamic Active i.e., Dynamic Active and Desjardins go up and down completely randomly.
Pair Corralation between Dynamic Active and Desjardins
Assuming the 90 days trading horizon Dynamic Active Global is expected to generate 1.9 times more return on investment than Desjardins. However, Dynamic Active is 1.9 times more volatile than Desjardins RI Global. It trades about 0.19 of its potential returns per unit of risk. Desjardins RI Global is currently generating about 0.22 per unit of risk. If you would invest 6,516 in Dynamic Active Global on August 29, 2024 and sell it today you would earn a total of 336.00 from holding Dynamic Active Global or generate 5.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dynamic Active Global vs. Desjardins RI Global
Performance |
| Timeline |
| Dynamic Active Global |
| Desjardins RI Global |
Dynamic Active and Desjardins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynamic Active and Desjardins
The main advantage of trading using opposite Dynamic Active and Desjardins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynamic Active position performs unexpectedly, Desjardins 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 will offset losses from the drop in Desjardins' long position.| Dynamic Active vs. Guardian i3 Global | Dynamic Active vs. CI Global Real | Dynamic Active vs. CI Enhanced Short | Dynamic Active vs. BMO Aggregate Bond |
| Desjardins vs. Global X Global | Desjardins vs. Desjardins RI USA | Desjardins vs. Desjardins RI Canada | Desjardins vs. Desjardins Canadian Preferred |
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 Stocks Directory module to find actively traded stocks across global markets.
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