Correlation Between Loblaw Companies and V
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies and V 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 V 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 V Group, you can compare the effects of market volatilities on Loblaw Companies and V 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 V. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and V.
Diversification Opportunities for Loblaw Companies and V
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Loblaw and V is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and V Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on V Group 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 V. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of V Group has no effect on the direction of Loblaw Companies i.e., Loblaw Companies and V go up and down completely randomly.
Pair Corralation between Loblaw Companies and V
Assuming the 90 days horizon Loblaw Companies is expected to generate 8.21 times less return on investment than V. But when comparing it to its historical volatility, Loblaw Companies Limited is 16.01 times less risky than V. It trades about 0.14 of its potential returns per unit of risk. V Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.01 in V Group on September 12, 2024 and sell it today you would earn a total of 0.00 from holding V Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 86.06% |
| Values | Daily Returns |
Loblaw Companies Limited vs. V Group
Performance |
| Timeline |
| Loblaw Companies |
| V Group |
Loblaw Companies and V Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and V
The main advantage of trading using opposite Loblaw Companies and V positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies position performs unexpectedly, V 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 V will offset losses from the drop in V's long position.| Loblaw Companies vs. V Group | Loblaw Companies vs. Fbec Worldwide | Loblaw Companies vs. Hiru Corporation | Loblaw Companies vs. Alkame Holdings |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
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