Correlation Between Picton Mahoney and Desjardins Alt
Can any of the company-specific risk be diversified away by investing in both Picton Mahoney and Desjardins Alt 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 Picton Mahoney and Desjardins Alt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Picton Mahoney Fortified and Desjardins Alt LongShort, you can compare the effects of market volatilities on Picton Mahoney and Desjardins Alt 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 Picton Mahoney with a short position of Desjardins Alt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Picton Mahoney and Desjardins Alt.
Diversification Opportunities for Picton Mahoney and Desjardins Alt
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Picton and Desjardins is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Picton Mahoney Fortified and Desjardins Alt LongShort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins Alt LongShort and Picton Mahoney 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 Picton Mahoney Fortified are associated (or correlated) with Desjardins Alt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins Alt LongShort has no effect on the direction of Picton Mahoney i.e., Picton Mahoney and Desjardins Alt go up and down completely randomly.
Pair Corralation between Picton Mahoney and Desjardins Alt
Assuming the 90 days trading horizon Picton Mahoney Fortified is expected to generate 2.88 times more return on investment than Desjardins Alt. However, Picton Mahoney is 2.88 times more volatile than Desjardins Alt LongShort. It trades about 0.12 of its potential returns per unit of risk. Desjardins Alt LongShort is currently generating about 0.15 per unit of risk. If you would invest 1,298 in Picton Mahoney Fortified on September 1, 2024 and sell it today you would earn a total of 254.00 from holding Picton Mahoney Fortified or generate 19.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Picton Mahoney Fortified vs. Desjardins Alt LongShort
Performance |
| Timeline |
| Picton Mahoney Fortified |
| Desjardins Alt LongShort |
Picton Mahoney and Desjardins Alt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Picton Mahoney and Desjardins Alt
The main advantage of trading using opposite Picton Mahoney and Desjardins Alt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Picton Mahoney position performs unexpectedly, Desjardins Alt 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 Desjardins Alt will offset losses from the drop in Desjardins Alt's long position.| Picton Mahoney vs. Brompton Global Dividend | Picton Mahoney vs. Global Healthcare Income | Picton Mahoney vs. Tech Leaders Income | Picton Mahoney vs. Brompton North American |
| Desjardins Alt vs. AGFiQ Market Neutral | Desjardins Alt vs. Desjardins RI Canada | Desjardins Alt vs. NBI Liquid Alternatives | Desjardins Alt vs. Desjardins RI USA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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