Correlation Between Olympia Financial and VersaBank
Can any of the company-specific risk be diversified away by investing in both Olympia Financial and VersaBank 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 Olympia Financial and VersaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Olympia Financial Group and VersaBank, you can compare the effects of market volatilities on Olympia Financial and VersaBank 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 Olympia Financial with a short position of VersaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Olympia Financial and VersaBank.
Diversification Opportunities for Olympia Financial and VersaBank
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Olympia and VersaBank is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Olympia Financial Group and VersaBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VersaBank and Olympia Financial 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 Olympia Financial Group are associated (or correlated) with VersaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VersaBank has no effect on the direction of Olympia Financial i.e., Olympia Financial and VersaBank go up and down completely randomly.
Pair Corralation between Olympia Financial and VersaBank
Assuming the 90 days trading horizon Olympia Financial is expected to generate 1.36 times less return on investment than VersaBank. In addition to that, Olympia Financial is 1.03 times more volatile than VersaBank. It trades about 0.06 of its total potential returns per unit of risk. VersaBank is currently generating about 0.09 per unit of volatility. If you would invest 998.00 in VersaBank on September 14, 2024 and sell it today you would earn a total of 1,230 from holding VersaBank or generate 123.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Olympia Financial Group vs. VersaBank
Performance |
| Timeline |
| Olympia Financial |
| VersaBank |
Olympia Financial and VersaBank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Olympia Financial and VersaBank
The main advantage of trading using opposite Olympia Financial and VersaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Olympia Financial position performs unexpectedly, VersaBank 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 VersaBank will offset losses from the drop in VersaBank's long position.| Olympia Financial vs. Firm Capital Mortgage | Olympia Financial vs. Atrium Mortgage Investment | Olympia Financial vs. MCAN Mortgage | Olympia Financial vs. Chesswood Group Limited |
| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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