Correlation Between Prime Dividend and Canadian Life
Can any of the company-specific risk be diversified away by investing in both Prime Dividend and Canadian Life 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 Canadian Life 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 Canadian Life Companies, you can compare the effects of market volatilities on Prime Dividend and Canadian Life 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 Canadian Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Dividend and Canadian Life.
Diversification Opportunities for Prime Dividend and Canadian Life
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prime and Canadian is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Prime Dividend Corp and Canadian Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Life Companies 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 Canadian Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Life Companies has no effect on the direction of Prime Dividend i.e., Prime Dividend and Canadian Life go up and down completely randomly.
Pair Corralation between Prime Dividend and Canadian Life
Assuming the 90 days trading horizon Prime Dividend Corp is expected to generate 0.92 times more return on investment than Canadian Life. However, Prime Dividend Corp is 1.09 times less risky than Canadian Life. It trades about -0.11 of its potential returns per unit of risk. Canadian Life Companies is currently generating about -0.15 per unit of risk. If you would invest 835.00 in Prime Dividend Corp on November 3, 2024 and sell it today you would lose (54.00) from holding Prime Dividend Corp or give up 6.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Dividend Corp vs. Canadian Life Companies
Performance |
| Timeline |
| Prime Dividend Corp |
| Canadian Life Companies |
Prime Dividend and Canadian Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Dividend and Canadian Life
The main advantage of trading using opposite Prime Dividend and Canadian Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Dividend position performs unexpectedly, Canadian Life 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 Canadian Life will offset losses from the drop in Canadian Life'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 |
| Canadian Life vs. Dividend 15 Split | Canadian Life vs. Brompton Lifeco Split | Canadian Life vs. North American Financial | Canadian Life vs. Prime Dividend Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Commodity Directory Find actively traded commodities issued by global exchanges |