Correlation Between Goeasy and Equitable
Can any of the company-specific risk be diversified away by investing in both Goeasy and Equitable 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 Goeasy and Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between goeasy and Equitable Group, you can compare the effects of market volatilities on Goeasy and Equitable 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 Goeasy with a short position of Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goeasy and Equitable.
Diversification Opportunities for Goeasy and Equitable
Very good diversification
The 3 months correlation between Goeasy and Equitable is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding goeasy and Equitable Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Group and Goeasy 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 goeasy are associated (or correlated) with Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Group has no effect on the direction of Goeasy i.e., Goeasy and Equitable go up and down completely randomly.
Pair Corralation between Goeasy and Equitable
Assuming the 90 days trading horizon Goeasy is expected to generate 1.01 times less return on investment than Equitable. In addition to that, Goeasy is 1.23 times more volatile than Equitable Group. It trades about 0.09 of its total potential returns per unit of risk. Equitable Group is currently generating about 0.11 per unit of volatility. If you would invest 6,764 in Equitable Group on August 25, 2024 and sell it today you would earn a total of 4,271 from holding Equitable Group or generate 63.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
goeasy vs. Equitable Group
Performance |
| Timeline |
| goeasy |
| Equitable Group |
Goeasy and Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goeasy and Equitable
The main advantage of trading using opposite Goeasy and Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goeasy position performs unexpectedly, Equitable 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 Equitable will offset losses from the drop in Equitable's long position.| Goeasy vs. Capstone Mining Corp | Goeasy vs. Falcon Energy Materials | Goeasy vs. Metalero Mining Corp | Goeasy vs. Wishpond Technologies |
| Equitable vs. goeasy | Equitable vs. Canadian Western Bank | Equitable vs. TFI International | Equitable vs. Intact Financial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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