Correlation Between Lassonde Industries and BMTC
Can any of the company-specific risk be diversified away by investing in both Lassonde Industries and BMTC 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 Lassonde Industries and BMTC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lassonde Industries and BMTC Group, you can compare the effects of market volatilities on Lassonde Industries and BMTC 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 Lassonde Industries with a short position of BMTC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lassonde Industries and BMTC.
Diversification Opportunities for Lassonde Industries and BMTC
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lassonde and BMTC is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Lassonde Industries and BMTC Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BMTC Group and Lassonde Industries 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 Lassonde Industries are associated (or correlated) with BMTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BMTC Group has no effect on the direction of Lassonde Industries i.e., Lassonde Industries and BMTC go up and down completely randomly.
Pair Corralation between Lassonde Industries and BMTC
Assuming the 90 days trading horizon Lassonde Industries is expected to generate 1.3 times more return on investment than BMTC. However, Lassonde Industries is 1.3 times more volatile than BMTC Group. It trades about 0.08 of its potential returns per unit of risk. BMTC Group is currently generating about 0.0 per unit of risk. If you would invest 9,987 in Lassonde Industries on August 30, 2024 and sell it today you would earn a total of 7,713 from holding Lassonde Industries or generate 77.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lassonde Industries vs. BMTC Group
Performance |
| Timeline |
| Lassonde Industries |
| BMTC Group |
Lassonde Industries and BMTC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lassonde Industries and BMTC
The main advantage of trading using opposite Lassonde Industries and BMTC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lassonde Industries position performs unexpectedly, BMTC 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 BMTC will offset losses from the drop in BMTC's long position.| Lassonde Industries vs. Richelieu Hardware | Lassonde Industries vs. Stella Jones | Lassonde Industries vs. Saputo Inc | Lassonde Industries vs. High Liner Foods |
| BMTC vs. Eros Resources Corp | BMTC vs. Apple Inc CDR | BMTC vs. European Residential Real | BMTC vs. Canadian Utilities Ltd |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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