Correlation Between VersaBank and Canso Credit
Can any of the company-specific risk be diversified away by investing in both VersaBank and Canso Credit 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 Canso Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and Canso Credit Trust, you can compare the effects of market volatilities on VersaBank and Canso Credit 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 Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and Canso Credit.
Diversification Opportunities for VersaBank and Canso Credit
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VersaBank and Canso is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and Canso Credit Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Credit 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 Canso Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Credit Trust has no effect on the direction of VersaBank i.e., VersaBank and Canso Credit go up and down completely randomly.
Pair Corralation between VersaBank and Canso Credit
Assuming the 90 days trading horizon VersaBank is expected to generate 5.03 times more return on investment than Canso Credit. However, VersaBank is 5.03 times more volatile than Canso Credit Trust. It trades about 0.35 of its potential returns per unit of risk. Canso Credit Trust is currently generating about 0.08 per unit of risk. If you would invest 1,767 in VersaBank on August 25, 2024 and sell it today you would earn a total of 603.00 from holding VersaBank or generate 34.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. Canso Credit Trust
Performance |
| Timeline |
| VersaBank |
| Canso Credit Trust |
VersaBank and Canso Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and Canso Credit
The main advantage of trading using opposite VersaBank and Canso Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, Canso Credit 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 Canso Credit will offset losses from the drop in Canso Credit's long position.| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
| Canso Credit vs. Royal Bank of | Canso Credit vs. Toronto Dominion Bank | Canso Credit vs. Toronto Dominion Bank Pref | Canso Credit vs. Amazon CDR |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |