Correlation Between Loblaw Companies and POWER METALS
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies and POWER METALS 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 POWER METALS 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 POWER METALS, you can compare the effects of market volatilities on Loblaw Companies and POWER METALS 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 POWER METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and POWER METALS.
Diversification Opportunities for Loblaw Companies and POWER METALS
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Loblaw and POWER is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and POWER METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWER METALS 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 POWER METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWER METALS has no effect on the direction of Loblaw Companies i.e., Loblaw Companies and POWER METALS go up and down completely randomly.
Pair Corralation between Loblaw Companies and POWER METALS
Assuming the 90 days horizon Loblaw Companies Limited is expected to generate 0.6 times more return on investment than POWER METALS. However, Loblaw Companies Limited is 1.68 times less risky than POWER METALS. It trades about 0.14 of its potential returns per unit of risk. POWER METALS is currently generating about -0.23 per unit of risk. If you would invest 11,600 in Loblaw Companies Limited on September 3, 2024 and sell it today you would earn a total of 600.00 from holding Loblaw Companies Limited or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loblaw Companies Limited vs. POWER METALS
Performance |
| Timeline |
| Loblaw Companies |
| POWER METALS |
Loblaw Companies and POWER METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and POWER METALS
The main advantage of trading using opposite Loblaw Companies and POWER METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies position performs unexpectedly, POWER METALS 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 METALS will offset losses from the drop in POWER METALS's long position.| Loblaw Companies vs. CapitaLand Investment Limited | Loblaw Companies vs. DIVERSIFIED ROYALTY | Loblaw Companies vs. EPSILON HEALTHCARE LTD | Loblaw Companies vs. PennantPark Investment |
| POWER METALS vs. HANOVER INSURANCE | POWER METALS vs. Ping An Insurance | POWER METALS vs. REVO INSURANCE SPA | POWER METALS vs. RETAIL FOOD GROUP |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |