Correlation Between Sienna Resources and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Sienna Resources and Laurentian Bank 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 Sienna Resources and Laurentian Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sienna Resources and Laurentian Bank, you can compare the effects of market volatilities on Sienna Resources and Laurentian Bank 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 Sienna Resources with a short position of Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sienna Resources and Laurentian Bank.
Diversification Opportunities for Sienna Resources and Laurentian Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sienna and Laurentian is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sienna Resources and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank and Sienna Resources 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 Sienna Resources are associated (or correlated) with Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Sienna Resources i.e., Sienna Resources and Laurentian Bank go up and down completely randomly.
Pair Corralation between Sienna Resources and Laurentian Bank
Assuming the 90 days horizon Sienna Resources is expected to generate 11.24 times more return on investment than Laurentian Bank. However, Sienna Resources is 11.24 times more volatile than Laurentian Bank. It trades about 0.12 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.33 per unit of risk. If you would invest 3.00 in Sienna Resources on September 13, 2024 and sell it today you would earn a total of 0.50 from holding Sienna Resources or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sienna Resources vs. Laurentian Bank
Performance |
| Timeline |
| Sienna Resources |
| Laurentian Bank |
Sienna Resources and Laurentian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sienna Resources and Laurentian Bank
The main advantage of trading using opposite Sienna Resources and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sienna Resources position performs unexpectedly, Laurentian Bank 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 Laurentian Bank will offset losses from the drop in Laurentian Bank's long position.| Sienna Resources vs. Laurentian Bank | Sienna Resources vs. iSign Media Solutions | Sienna Resources vs. VIP Entertainment Technologies | Sienna Resources vs. Forsys Metals Corp |
| Laurentian Bank vs. Sylogist | Laurentian Bank vs. Sangoma Technologies Corp | Laurentian Bank vs. Firan Technology Group | Laurentian Bank vs. iShares Canadian HYBrid |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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