Correlation Between Laurentian Bank and SPoT Coffee
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank and SPoT Coffee 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 SPoT Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and SPoT Coffee, you can compare the effects of market volatilities on Laurentian Bank and SPoT Coffee 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 SPoT Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and SPoT Coffee.
Diversification Opportunities for Laurentian Bank and SPoT Coffee
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Laurentian and SPoT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and SPoT Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPoT Coffee 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 SPoT Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPoT Coffee has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and SPoT Coffee go up and down completely randomly.
Pair Corralation between Laurentian Bank and SPoT Coffee
If you would invest 2,653 in Laurentian Bank on August 25, 2024 and sell it today you would earn a total of 228.00 from holding Laurentian Bank or generate 8.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Laurentian Bank vs. SPoT Coffee
Performance |
| Timeline |
| Laurentian Bank |
| SPoT Coffee |
Laurentian Bank and SPoT Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laurentian Bank and SPoT Coffee
The main advantage of trading using opposite Laurentian Bank and SPoT Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank position performs unexpectedly, SPoT Coffee 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 SPoT Coffee will offset losses from the drop in SPoT Coffee's 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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