Correlation Between Laurentian Bank and BOEING CDR
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank and BOEING CDR 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 Laurentian Bank and BOEING CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and BOEING CDR, you can compare the effects of market volatilities on Laurentian Bank and BOEING CDR 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 Laurentian Bank with a short position of BOEING CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and BOEING CDR.
Diversification Opportunities for Laurentian Bank and BOEING CDR
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Laurentian and BOEING is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and BOEING CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BOEING CDR and Laurentian Bank 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 Laurentian Bank are associated (or correlated) with BOEING CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BOEING CDR has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and BOEING CDR go up and down completely randomly.
Pair Corralation between Laurentian Bank and BOEING CDR
Assuming the 90 days horizon Laurentian Bank is expected to generate 1.05 times more return on investment than BOEING CDR. However, Laurentian Bank is 1.05 times more volatile than BOEING CDR. It trades about 0.01 of its potential returns per unit of risk. BOEING CDR is currently generating about -0.04 per unit of risk. If you would invest 2,990 in Laurentian Bank on August 31, 2024 and sell it today you would lose (25.00) from holding Laurentian Bank or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Laurentian Bank vs. BOEING CDR
Performance |
| Timeline |
| Laurentian Bank |
| BOEING CDR |
Laurentian Bank and BOEING CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laurentian Bank and BOEING CDR
The main advantage of trading using opposite Laurentian Bank and BOEING CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank position performs unexpectedly, BOEING CDR 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 BOEING CDR will offset losses from the drop in BOEING CDR's long position.| Laurentian Bank vs. iShares Canadian HYBrid | Laurentian Bank vs. Brompton European Dividend | Laurentian Bank vs. Solar Alliance Energy | Laurentian Bank vs. PHN Multi Style All Cap |
| BOEING CDR vs. Cogeco Communications | BOEING CDR vs. Canso Select Opportunities | BOEING CDR vs. Endeavour Silver Corp | BOEING CDR vs. Monument Mining Limited |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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