Correlation Between Willdan and SNC Lavalin
Can any of the company-specific risk be diversified away by investing in both Willdan and SNC Lavalin 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 Willdan and SNC Lavalin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willdan Group and SNC Lavalin Group, you can compare the effects of market volatilities on Willdan and SNC Lavalin 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 Willdan with a short position of SNC Lavalin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willdan and SNC Lavalin.
Diversification Opportunities for Willdan and SNC Lavalin
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Willdan and SNC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Willdan Group and SNC Lavalin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Lavalin Group and Willdan 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 Willdan Group are associated (or correlated) with SNC Lavalin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Lavalin Group has no effect on the direction of Willdan i.e., Willdan and SNC Lavalin go up and down completely randomly.
Pair Corralation between Willdan and SNC Lavalin
Given the investment horizon of 90 days Willdan is expected to generate 1.03 times less return on investment than SNC Lavalin. But when comparing it to its historical volatility, Willdan Group is 1.18 times less risky than SNC Lavalin. It trades about 0.12 of its potential returns per unit of risk. SNC Lavalin Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,877 in SNC Lavalin Group on September 1, 2024 and sell it today you would earn a total of 1,407 from holding SNC Lavalin Group or generate 36.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willdan Group vs. SNC Lavalin Group
Performance |
| Timeline |
| Willdan Group |
| SNC Lavalin Group |
Willdan and SNC Lavalin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willdan and SNC Lavalin
The main advantage of trading using opposite Willdan and SNC Lavalin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willdan position performs unexpectedly, SNC Lavalin 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 SNC Lavalin will offset losses from the drop in SNC Lavalin's long position.| Willdan vs. SNC Lavalin Group | Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group |
| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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