Correlation Between WSP Global and SNC Lavalin
Can any of the company-specific risk be diversified away by investing in both WSP Global 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 WSP Global and SNC Lavalin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WSP Global and SNC Lavalin Group, you can compare the effects of market volatilities on WSP Global 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 WSP Global with a short position of SNC Lavalin. Check out your portfolio center. Please also check ongoing floating volatility patterns of WSP Global and SNC Lavalin.
Diversification Opportunities for WSP Global and SNC Lavalin
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between WSP and SNC is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding WSP Global 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 WSP Global 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 WSP Global 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 WSP Global i.e., WSP Global and SNC Lavalin go up and down completely randomly.
Pair Corralation between WSP Global and SNC Lavalin
Assuming the 90 days horizon WSP Global is expected to under-perform the SNC Lavalin. But the pink sheet apears to be less risky and, when comparing its historical volatility, WSP Global is 1.6 times less risky than SNC Lavalin. The pink sheet trades about -0.08 of its potential returns per unit of risk. The SNC Lavalin Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,203 in SNC Lavalin Group on November 4, 2024 and sell it today you would lose (183.00) from holding SNC Lavalin Group or give up 3.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WSP Global vs. SNC Lavalin Group
Performance |
| Timeline |
| WSP Global |
| SNC Lavalin Group |
WSP Global and SNC Lavalin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WSP Global and SNC Lavalin
The main advantage of trading using opposite WSP Global and SNC Lavalin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WSP Global 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.| WSP Global vs. George Weston Limited | WSP Global vs. Intact Financial | WSP Global vs. Metro Inc | WSP Global vs. Kingspan Group PLC |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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