Correlation Between SPTSX Dividend and Power Fi

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Can any of the company-specific risk be diversified away by investing in both SPTSX Dividend and Power Fi 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 SPTSX Dividend and Power Fi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SPTSX Dividend Aristocrats and Power Fi 440, you can compare the effects of market volatilities on SPTSX Dividend and Power Fi 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 SPTSX Dividend with a short position of Power Fi. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and Power Fi.

Diversification Opportunities for SPTSX Dividend and Power Fi

0.68

Correlation Coefficient

SPTSX Dividend

Power Fi

Poor diversification

The 3 months correlation between SPTSX and Power is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and Power Fi 440 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Fi 440 and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with Power Fi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Fi 440 has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and Power Fi go up and down completely randomly.

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Pair Corralation between SPTSX Dividend and Power Fi

Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 1.12 times less return on investment than Power Fi. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 1.88 times less risky than Power Fi. It trades about 0.14 of its potential returns per unit of risk. Power Fi 440 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,248 in Power Fi 440 on September 14, 2024 and sell it today you would earn a total of 329.00 from holding Power Fi 440 or generate 26.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.26%
Values	Daily Returns

SPTSX Dividend Aristocrats vs. Power Fi 440

Performance

Timeline

SPTSX Dividend and Power Fi Volatility Contrast

Predicted Return Density

Returns

SPTSX Dividend Aristocrats

Pair trading matchups for SPTSX Dividend

	SPTSX Dividend vs. Westshore Terminals Investment
	SPTSX Dividend vs. NorthWest Healthcare Properties
	SPTSX Dividend vs. Leveljump Healthcare Corp
	SPTSX Dividend vs. Highwood Asset Management

Power Fi 440

Pair trading matchups for Power Fi

	Power Fi vs. TGS Esports
	Power Fi vs. Computer Modelling Group
	Power Fi vs. Overactive Media Corp
	Power Fi vs. Postmedia Network Canada

Pair Trading with SPTSX Dividend and Power Fi

The main advantage of trading using opposite SPTSX Dividend and Power Fi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, Power Fi 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 Power Fi will offset losses from the drop in Power Fi's long position.

	SPTSX Dividend vs. Westshore Terminals Investment
	SPTSX Dividend vs. NorthWest Healthcare Properties
	SPTSX Dividend vs. Leveljump Healthcare Corp
	SPTSX Dividend vs. Highwood Asset Management

The idea behind SPTSX Dividend Aristocrats and Power Fi 440 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

	Power Fi vs. TGS Esports
	Power Fi vs. Computer Modelling Group
	Power Fi vs. Overactive Media Corp
	Power Fi vs. Postmedia Network Canada

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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