Correlation Between SNC Lavalin and Willdan
Can any of the company-specific risk be diversified away by investing in both SNC Lavalin and Willdan 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 SNC Lavalin and Willdan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNC Lavalin Group and Willdan Group, you can compare the effects of market volatilities on SNC Lavalin and Willdan 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 SNC Lavalin with a short position of Willdan. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNC Lavalin and Willdan.
Diversification Opportunities for SNC Lavalin and Willdan
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SNC and Willdan is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SNC Lavalin Group and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group and SNC Lavalin 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 SNC Lavalin Group are associated (or correlated) with Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of SNC Lavalin i.e., SNC Lavalin and Willdan go up and down completely randomly.
Pair Corralation between SNC Lavalin and Willdan
Assuming the 90 days horizon SNC Lavalin Group is expected to generate 1.39 times more return on investment than Willdan. However, SNC Lavalin is 1.39 times more volatile than Willdan Group. It trades about 0.08 of its potential returns per unit of risk. Willdan Group is currently generating about -0.06 per unit of risk. If you would invest 4,834 in SNC Lavalin Group on August 24, 2024 and sell it today you would earn a total of 267.00 from holding SNC Lavalin Group or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNC Lavalin Group vs. Willdan Group
Performance |
| Timeline |
| SNC Lavalin Group |
| Willdan Group |
SNC Lavalin and Willdan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNC Lavalin and Willdan
The main advantage of trading using opposite SNC Lavalin and Willdan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC Lavalin position performs unexpectedly, Willdan 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 Willdan will offset losses from the drop in Willdan's long position.| SNC Lavalin vs. Element Solutions | SNC Lavalin vs. Orion Engineered Carbons | SNC Lavalin vs. Minerals Technologies | SNC Lavalin vs. Ingevity Corp |
| Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group | Willdan vs. Matrix Service Co |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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