Correlation Between Loblaw Companies and NanoXplore
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies and NanoXplore 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 Loblaw Companies and NanoXplore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loblaw Companies Limited and NanoXplore, you can compare the effects of market volatilities on Loblaw Companies and NanoXplore 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 Loblaw Companies with a short position of NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and NanoXplore.
Diversification Opportunities for Loblaw Companies and NanoXplore
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loblaw and NanoXplore is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore and Loblaw Companies 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 Loblaw Companies Limited are associated (or correlated) with NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of Loblaw Companies i.e., Loblaw Companies and NanoXplore go up and down completely randomly.
Pair Corralation between Loblaw Companies and NanoXplore
Given the investment horizon of 90 days Loblaw Companies Limited is expected to generate 0.32 times more return on investment than NanoXplore. However, Loblaw Companies Limited is 3.13 times less risky than NanoXplore. It trades about 0.1 of its potential returns per unit of risk. NanoXplore is currently generating about 0.0 per unit of risk. If you would invest 11,206 in Loblaw Companies Limited on October 23, 2024 and sell it today you would earn a total of 6,907 from holding Loblaw Companies Limited or generate 61.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Loblaw Companies Limited vs. NanoXplore
Performance |
| Timeline |
| Loblaw Companies |
| NanoXplore |
Loblaw Companies and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and NanoXplore
The main advantage of trading using opposite Loblaw Companies and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore's long position.| Loblaw Companies vs. Metro Inc | Loblaw Companies vs. George Weston Limited | Loblaw Companies vs. Canadian Tire | Loblaw Companies vs. Dollarama |
| NanoXplore vs. Graphene Manufacturing Group | NanoXplore vs. Nano One Materials | NanoXplore vs. Coveo Solutions | NanoXplore vs. ZEN Graphene Solutions |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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