Correlation Between HEALTHCARE REAL and Dollarama
Can any of the company-specific risk be diversified away by investing in both HEALTHCARE REAL and Dollarama 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 HEALTHCARE REAL and Dollarama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HEALTHCARE REAL A and Dollarama, you can compare the effects of market volatilities on HEALTHCARE REAL and Dollarama 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 HEALTHCARE REAL with a short position of Dollarama. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE REAL and Dollarama.
Diversification Opportunities for HEALTHCARE REAL and Dollarama
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between HEALTHCARE and Dollarama is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE REAL A and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and HEALTHCARE REAL 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 HEALTHCARE REAL A are associated (or correlated) with Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of HEALTHCARE REAL i.e., HEALTHCARE REAL and Dollarama go up and down completely randomly.
Pair Corralation between HEALTHCARE REAL and Dollarama
Assuming the 90 days horizon HEALTHCARE REAL is expected to generate 1.52 times less return on investment than Dollarama. In addition to that, HEALTHCARE REAL is 1.12 times more volatile than Dollarama. It trades about 0.07 of its total potential returns per unit of risk. Dollarama is currently generating about 0.12 per unit of volatility. If you would invest 6,770 in Dollarama on September 4, 2024 and sell it today you would earn a total of 3,188 from holding Dollarama or generate 47.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
HEALTHCARE REAL A vs. Dollarama
Performance |
| Timeline |
| HEALTHCARE REAL A |
| Dollarama |
HEALTHCARE REAL and Dollarama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HEALTHCARE REAL and Dollarama
The main advantage of trading using opposite HEALTHCARE REAL and Dollarama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEALTHCARE REAL position performs unexpectedly, Dollarama 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 Dollarama will offset losses from the drop in Dollarama's long position.| HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc | HEALTHCARE REAL vs. Apple Inc |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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