Correlation Between VersaBank and Income Financial
Can any of the company-specific risk be diversified away by investing in both VersaBank and Income Financial 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 Income Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Income Financial Trust, you can compare the effects of market volatilities on VersaBank and Income Financial 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 Income Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Income Financial.
Diversification Opportunities for VersaBank and Income Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VersaBank and Income is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and Income Financial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Financial Trust 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 Income Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Financial Trust has no effect on the direction of VersaBank i.e., VersaBank and Income Financial go up and down completely randomly.
Pair Corralation between VersaBank and Income Financial
Assuming the 90 days trading horizon VersaBank is expected to generate 1.04 times more return on investment than Income Financial. However, VersaBank is 1.04 times more volatile than Income Financial Trust. It trades about 0.14 of its potential returns per unit of risk. Income Financial Trust is currently generating about 0.04 per unit of risk. If you would invest 1,092 in VersaBank on August 29, 2024 and sell it today you would earn a total of 1,405 from holding VersaBank or generate 128.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. Income Financial Trust
Performance |
| Timeline |
| VersaBank |
| Income Financial Trust |
VersaBank and Income Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Income Financial
The main advantage of trading using opposite VersaBank and Income Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, Income Financial 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 Income Financial will offset losses from the drop in Income Financial's long position.| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
| Income Financial vs. Dividend Select 15 | Income Financial vs. Global Dividend Growth | Income Financial vs. Brompton Split Banc | Income Financial vs. Real Estate E Commerce |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |