Correlation Between Prime Dividend and Life Banc
Can any of the company-specific risk be diversified away by investing in both Prime Dividend and Life Banc 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 Prime Dividend and Life Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Dividend Corp and Life Banc Split, you can compare the effects of market volatilities on Prime Dividend and Life Banc 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 Prime Dividend with a short position of Life Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Dividend and Life Banc.
Diversification Opportunities for Prime Dividend and Life Banc
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Prime and Life is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Prime Dividend Corp and Life Banc Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Banc Split and Prime Dividend 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 Prime Dividend Corp are associated (or correlated) with Life Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Banc Split has no effect on the direction of Prime Dividend i.e., Prime Dividend and Life Banc go up and down completely randomly.
Pair Corralation between Prime Dividend and Life Banc
Assuming the 90 days trading horizon Prime Dividend is expected to generate 1.35 times less return on investment than Life Banc. In addition to that, Prime Dividend is 1.27 times more volatile than Life Banc Split. It trades about 0.26 of its total potential returns per unit of risk. Life Banc Split is currently generating about 0.45 per unit of volatility. If you would invest 870.00 in Life Banc Split on August 30, 2024 and sell it today you would earn a total of 100.00 from holding Life Banc Split or generate 11.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Dividend Corp vs. Life Banc Split
Performance |
| Timeline |
| Prime Dividend Corp |
| Life Banc Split |
Prime Dividend and Life Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Dividend and Life Banc
The main advantage of trading using opposite Prime Dividend and Life Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Dividend position performs unexpectedly, Life Banc 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 Life Banc will offset losses from the drop in Life Banc's long position.| Prime Dividend vs. TDb Split Corp | Prime Dividend vs. Dividend Select 15 | Prime Dividend vs. Canadian Life Companies | Prime Dividend vs. Brompton Lifeco Split |
| Life Banc vs. Global Dividend Growth | Life Banc vs. Dividend Growth Split | Life Banc vs. Brompton Split Banc | Life Banc vs. Financial 15 Split |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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