Correlation Between VersaBank and DelphX Capital
Can any of the company-specific risk be diversified away by investing in both VersaBank and DelphX Capital 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 VersaBank and DelphX Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and DelphX Capital Markets, you can compare the effects of market volatilities on VersaBank and DelphX Capital 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 VersaBank with a short position of DelphX Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and DelphX Capital.
Diversification Opportunities for VersaBank and DelphX Capital
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VersaBank and DelphX is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and DelphX Capital Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DelphX Capital Markets and VersaBank 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 VersaBank are associated (or correlated) with DelphX Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DelphX Capital Markets has no effect on the direction of VersaBank i.e., VersaBank and DelphX Capital go up and down completely randomly.
Pair Corralation between VersaBank and DelphX Capital
Assuming the 90 days trading horizon VersaBank is expected to generate 1.58 times less return on investment than DelphX Capital. But when comparing it to its historical volatility, VersaBank is 4.42 times less risky than DelphX Capital. It trades about 0.13 of its potential returns per unit of risk. DelphX Capital Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.50 in DelphX Capital Markets on September 4, 2024 and sell it today you would earn a total of 1.50 from holding DelphX Capital Markets or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. DelphX Capital Markets
Performance |
| Timeline |
| VersaBank |
| DelphX Capital Markets |
VersaBank and DelphX Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and DelphX Capital
The main advantage of trading using opposite VersaBank and DelphX Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, DelphX Capital 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 DelphX Capital will offset losses from the drop in DelphX Capital's long position.| VersaBank vs. Canadian Western Bank | VersaBank vs. National Bank of | VersaBank vs. Canadian Imperial Bank | VersaBank vs. Great West Lifeco |
| DelphX Capital vs. High Liner Foods | DelphX Capital vs. Slate Grocery REIT | DelphX Capital vs. Algoma Steel Group | DelphX Capital vs. Gfl Environmental Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |