Correlation Between Saville Resources and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Saville 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 Saville 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 Saville Resources and Laurentian Bank, you can compare the effects of market volatilities on Saville 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 Saville Resources with a short position of Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saville Resources and Laurentian Bank.
Diversification Opportunities for Saville Resources and Laurentian Bank
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Saville and Laurentian is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Saville Resources and Laurentian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank and Saville 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 Saville 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 Saville Resources i.e., Saville Resources and Laurentian Bank go up and down completely randomly.
Pair Corralation between Saville Resources and Laurentian Bank
Assuming the 90 days horizon Saville Resources is expected to generate 5.2 times more return on investment than Laurentian Bank. However, Saville Resources is 5.2 times more volatile than Laurentian Bank. It trades about 0.05 of its potential returns per unit of risk. Laurentian Bank is currently generating about 0.01 per unit of risk. If you would invest 40.00 in Saville Resources on September 4, 2024 and sell it today you would earn a total of 0.00 from holding Saville Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Saville Resources vs. Laurentian Bank
Performance |
| Timeline |
| Saville Resources |
| Laurentian Bank |
Saville Resources and Laurentian Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saville Resources and Laurentian Bank
The main advantage of trading using opposite Saville Resources and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saville 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.| Saville Resources vs. Maple Peak Investments | Saville Resources vs. Champion Gaming Group | Saville Resources vs. Verizon Communications CDR | Saville Resources vs. Element Fleet Management |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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