Correlation Between Everyday People and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Everyday People and Laurentian Bank 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 Everyday People and Laurentian Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everyday People Financial and Laurentian Bank, you can compare the effects of market volatilities on Everyday People and Laurentian Bank 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 Everyday People with a short position of Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everyday People and Laurentian Bank.
Diversification Opportunities for Everyday People and Laurentian Bank
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Everyday and Laurentian is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Everyday People Financial and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank and Everyday People 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 Everyday People Financial are associated (or correlated) with Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Everyday People i.e., Everyday People and Laurentian Bank go up and down completely randomly.
Pair Corralation between Everyday People and Laurentian Bank
Assuming the 90 days horizon Everyday People Financial is expected to generate 3.01 times more return on investment than Laurentian Bank. However, Everyday People is 3.01 times more volatile than Laurentian Bank. It trades about 0.11 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.22 per unit of risk. If you would invest 38.00 in Everyday People Financial on September 5, 2024 and sell it today you would earn a total of 5.00 from holding Everyday People Financial or generate 13.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Everyday People Financial vs. Laurentian Bank
Performance |
Timeline |
Everyday People Financial |
Laurentian Bank |
Everyday People and Laurentian Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Everyday People and Laurentian Bank
The main advantage of trading using opposite Everyday People and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyday People position performs unexpectedly, Laurentian Bank 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 Laurentian Bank will offset losses from the drop in Laurentian Bank's long position.Everyday People vs. Slate Grocery REIT | Everyday People vs. Roots Corp | Everyday People vs. Aimia Inc | Everyday People vs. Morguard Real Estate |
Laurentian Bank vs. Canadian Western Bank | Laurentian Bank vs. National Bank of | Laurentian Bank vs. Canadian Imperial Bank | Laurentian Bank vs. Great West Lifeco |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation |