Correlation Between Virtus Investment and Dollarama
Can any of the company-specific risk be diversified away by investing in both Virtus Investment 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 Virtus Investment and Dollarama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus Investment Partners and Dollarama, you can compare the effects of market volatilities on Virtus Investment 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 Virtus Investment with a short position of Dollarama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus Investment and Dollarama.
Diversification Opportunities for Virtus Investment and Dollarama
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Virtus and Dollarama is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and Virtus Investment 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and Dollarama go up and down completely randomly.
Pair Corralation between Virtus Investment and Dollarama
Assuming the 90 days horizon Virtus Investment is expected to generate 2.24 times less return on investment than Dollarama. In addition to that, Virtus Investment is 1.49 times more volatile than Dollarama. It trades about 0.03 of its total potential returns per unit of risk. Dollarama is currently generating about 0.11 per unit of volatility. If you would invest 7,633 in Dollarama on September 3, 2024 and sell it today you would earn a total of 2,083 from holding Dollarama or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus Investment Partners vs. Dollarama
Performance |
| Timeline |
| Virtus Investment |
| Dollarama |
Virtus Investment and Dollarama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus Investment and Dollarama
The main advantage of trading using opposite Virtus Investment and Dollarama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus Investment 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.| Virtus Investment vs. Blackstone Group | Virtus Investment vs. BlackRock | Virtus Investment vs. The Bank of | Virtus Investment vs. Ameriprise Financial |
| Dollarama vs. United Airlines Holdings | Dollarama vs. SHIP HEALTHCARE HLDGINC | Dollarama vs. HEALTHCARE REAL A | Dollarama vs. Singapore Airlines Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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