Correlation Between BetaPro Crude and Desjardins
Can any of the company-specific risk be diversified away by investing in both BetaPro Crude 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 BetaPro Crude and Desjardins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Crude Oil and Desjardins 1 5 Year, you can compare the effects of market volatilities on BetaPro Crude 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 BetaPro Crude with a short position of Desjardins. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Crude and Desjardins.
Diversification Opportunities for BetaPro Crude and Desjardins
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and Desjardins is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Crude Oil and Desjardins 1 5 Year in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins 1 5 and BetaPro Crude 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 BetaPro Crude Oil 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 1 5 has no effect on the direction of BetaPro Crude i.e., BetaPro Crude and Desjardins go up and down completely randomly.
Pair Corralation between BetaPro Crude and Desjardins
Assuming the 90 days trading horizon BetaPro Crude Oil is expected to generate 17.3 times more return on investment than Desjardins. However, BetaPro Crude is 17.3 times more volatile than Desjardins 1 5 Year. It trades about 0.01 of its potential returns per unit of risk. Desjardins 1 5 Year is currently generating about 0.1 per unit of risk. If you would invest 1,242 in BetaPro Crude Oil on August 30, 2024 and sell it today you would lose (101.00) from holding BetaPro Crude Oil or give up 8.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Crude Oil vs. Desjardins 1 5 Year
Performance |
| Timeline |
| BetaPro Crude Oil |
| Desjardins 1 5 |
BetaPro Crude and Desjardins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Crude and Desjardins
The main advantage of trading using opposite BetaPro Crude and Desjardins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Crude 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.| BetaPro Crude vs. BetaPro Canadian Gold | BetaPro Crude vs. BetaPro Crude Oil | BetaPro Crude vs. BetaPro Natural Gas | BetaPro Crude vs. BetaPro SPTSX 60 |
| Desjardins vs. iShares Canadian Short | Desjardins vs. iShares Core Canadian | Desjardins vs. BMO Short Corporate | Desjardins vs. Vanguard Canadian Short |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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