Correlation Between SPoT Coffee and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both SPoT Coffee 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 SPoT Coffee and Laurentian Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPoT Coffee and Laurentian Bank, you can compare the effects of market volatilities on SPoT Coffee 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 SPoT Coffee with a short position of Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPoT Coffee and Laurentian Bank.
Diversification Opportunities for SPoT Coffee and Laurentian Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPoT and Laurentian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPoT Coffee and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank and SPoT Coffee 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 SPoT Coffee 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 SPoT Coffee i.e., SPoT Coffee and Laurentian Bank go up and down completely randomly.
Pair Corralation between SPoT Coffee and Laurentian Bank
Assuming the 90 days horizon SPoT Coffee is expected to under-perform the Laurentian Bank. In addition to that, SPoT Coffee is 4.42 times more volatile than Laurentian Bank. It trades about 0.0 of its total potential returns per unit of risk. Laurentian Bank is currently generating about 0.01 per unit of volatility. If you would invest 2,908 in Laurentian Bank on August 29, 2024 and sell it today you would earn a total of 21.00 from holding Laurentian Bank or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPoT Coffee vs. Laurentian Bank
Performance |
| Timeline |
| SPoT Coffee |
| Laurentian Bank |
SPoT Coffee and Laurentian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPoT Coffee and Laurentian Bank
The main advantage of trading using opposite SPoT Coffee and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPoT Coffee 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.| SPoT Coffee vs. Apple Inc CDR | SPoT Coffee vs. Berkshire Hathaway CDR | SPoT Coffee vs. Microsoft Corp CDR | SPoT Coffee vs. Alphabet Inc CDR |
| Laurentian Bank vs. Canadian Western Bank | Laurentian Bank vs. National Bank of | Laurentian Bank vs. Canadian Imperial Bank | Laurentian Bank vs. Great West Lifeco |
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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