Correlation Between Vastned Retail and Dollarama
Can any of the company-specific risk be diversified away by investing in both Vastned Retail and Dollarama 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 Vastned Retail and Dollarama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vastned Retail NV and Dollarama, you can compare the effects of market volatilities on Vastned Retail and Dollarama 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 Vastned Retail with a short position of Dollarama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vastned Retail and Dollarama.
Diversification Opportunities for Vastned Retail and Dollarama
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vastned and Dollarama is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Vastned Retail NV and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and Vastned Retail 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 Vastned Retail NV are associated (or correlated) with Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of Vastned Retail i.e., Vastned Retail and Dollarama go up and down completely randomly.
Pair Corralation between Vastned Retail and Dollarama
Assuming the 90 days horizon Vastned Retail is expected to generate 1.71 times less return on investment than Dollarama. In addition to that, Vastned Retail is 1.03 times more volatile than Dollarama. It trades about 0.05 of its total potential returns per unit of risk. Dollarama is currently generating about 0.09 per unit of volatility. If you would invest 5,451 in Dollarama on September 13, 2024 and sell it today you would earn a total of 4,011 from holding Dollarama or generate 73.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vastned Retail NV vs. Dollarama
Performance |
| Timeline |
| Vastned Retail NV |
| Dollarama |
Vastned Retail and Dollarama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vastned Retail and Dollarama
The main advantage of trading using opposite Vastned Retail and Dollarama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vastned Retail position performs unexpectedly, Dollarama 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 Dollarama will offset losses from the drop in Dollarama's long position.| Vastned Retail vs. Guidewire Software | Vastned Retail vs. Evolution Mining Limited | Vastned Retail vs. TAL Education Group | Vastned Retail vs. MAGIC SOFTWARE ENTR |
| Dollarama vs. Vastned Retail NV | Dollarama vs. ALERION CLEANPOWER | Dollarama vs. SPARTAN STORES | Dollarama vs. PICKN PAY STORES |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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