Correlation Between Laurentian Bank and Bewhere Holdings
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank and Bewhere Holdings 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 Bewhere Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and Bewhere Holdings, you can compare the effects of market volatilities on Laurentian Bank and Bewhere Holdings 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 Bewhere Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and Bewhere Holdings.
Diversification Opportunities for Laurentian Bank and Bewhere Holdings
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laurentian and Bewhere is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and Bewhere Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bewhere Holdings 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 Bewhere Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bewhere Holdings has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and Bewhere Holdings go up and down completely randomly.
Pair Corralation between Laurentian Bank and Bewhere Holdings
Assuming the 90 days horizon Laurentian Bank is expected to under-perform the Bewhere Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Laurentian Bank is 2.05 times less risky than Bewhere Holdings. The stock trades about 0.0 of its potential returns per unit of risk. The Bewhere Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Bewhere Holdings on November 9, 2024 and sell it today you would earn a total of 46.00 from holding Bewhere Holdings or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laurentian Bank vs. Bewhere Holdings
Performance |
| Timeline |
| Laurentian Bank |
| Bewhere Holdings |
Laurentian Bank and Bewhere Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laurentian Bank and Bewhere Holdings
The main advantage of trading using opposite Laurentian Bank and Bewhere Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank position performs unexpectedly, Bewhere Holdings 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 Bewhere Holdings will offset losses from the drop in Bewhere Holdings' long position.| Laurentian Bank vs. Canadian Western Bank | Laurentian Bank vs. National Bank of | Laurentian Bank vs. Canadian Imperial Bank | Laurentian Bank vs. Great West Lifeco |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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