Correlation Between Exchange Income and Savaria
Can any of the company-specific risk be diversified away by investing in both Exchange Income and Savaria 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 Exchange Income and Savaria into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Savaria, you can compare the effects of market volatilities on Exchange Income and Savaria 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 Exchange Income with a short position of Savaria. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Savaria.
Diversification Opportunities for Exchange Income and Savaria
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exchange and Savaria is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and Savaria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savaria and Exchange Income 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 Exchange Income are associated (or correlated) with Savaria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savaria has no effect on the direction of Exchange Income i.e., Exchange Income and Savaria go up and down completely randomly.
Pair Corralation between Exchange Income and Savaria
Assuming the 90 days trading horizon Exchange Income is expected to generate 1.64 times less return on investment than Savaria. But when comparing it to its historical volatility, Exchange Income is 1.28 times less risky than Savaria. It trades about 0.04 of its potential returns per unit of risk. Savaria is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,621 in Savaria on August 31, 2024 and sell it today you would earn a total of 500.00 from holding Savaria or generate 30.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Savaria
Performance |
| Timeline |
| Exchange Income |
| Savaria |
Exchange Income and Savaria Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Savaria
The main advantage of trading using opposite Exchange Income and Savaria positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income position performs unexpectedly, Savaria 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 Savaria will offset losses from the drop in Savaria's long position.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
| Savaria vs. TFI International | Savaria vs. goeasy | Savaria vs. Enghouse Systems | Savaria vs. Exchange Income |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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