Correlation Between VersaBank and WildBrain
Can any of the company-specific risk be diversified away by investing in both VersaBank and WildBrain 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 WildBrain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and WildBrain, you can compare the effects of market volatilities on VersaBank and WildBrain 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 WildBrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and WildBrain.
Diversification Opportunities for VersaBank and WildBrain
Pay attention - limited upside
The 3 months correlation between VersaBank and WildBrain is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and WildBrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WildBrain 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 WildBrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WildBrain has no effect on the direction of VersaBank i.e., VersaBank and WildBrain go up and down completely randomly.
Pair Corralation between VersaBank and WildBrain
Assuming the 90 days trading horizon VersaBank is expected to generate 0.42 times more return on investment than WildBrain. However, VersaBank is 2.38 times less risky than WildBrain. It trades about 0.45 of its potential returns per unit of risk. WildBrain is currently generating about -0.09 per unit of risk. If you would invest 2,060 in VersaBank on August 29, 2024 and sell it today you would earn a total of 377.00 from holding VersaBank or generate 18.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VersaBank vs. WildBrain
Performance |
| Timeline |
| VersaBank |
| WildBrain |
VersaBank and WildBrain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VersaBank and WildBrain
The main advantage of trading using opposite VersaBank and WildBrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, WildBrain 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 WildBrain will offset losses from the drop in WildBrain's long position.| VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. Hammond Power Solutions |
| WildBrain vs. Maple Leaf Foods | WildBrain vs. Western Copper and | WildBrain vs. Rubicon Organics | WildBrain vs. Lion One Metals |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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