Correlation Between Andlauer Healthcare and VersaBank

Can any of the company-specific risk be diversified away by investing in both Andlauer Healthcare and VersaBank 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 Andlauer Healthcare and VersaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Andlauer Healthcare Gr and VersaBank, you can compare the effects of market volatilities on Andlauer Healthcare and VersaBank 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 Andlauer Healthcare with a short position of VersaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andlauer Healthcare and VersaBank.

Diversification Opportunities for Andlauer Healthcare and VersaBank

0.72

Correlation Coefficient

Andlauer Healthcare  VersaBank

Poor diversification

The 3 months correlation between Andlauer and VersaBank is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Andlauer Healthcare Gr and VersaBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VersaBank and Andlauer Healthcare 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 Andlauer Healthcare Gr are associated (or correlated) with VersaBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VersaBank has no effect on the direction of Andlauer Healthcare i.e., Andlauer Healthcare and VersaBank go up and down completely randomly.

Pair Corralation between Andlauer Healthcare and VersaBank

Assuming the 90 days trading horizon Andlauer Healthcare Gr is expected to generate 0.49 times more return on investment than VersaBank. However, Andlauer Healthcare Gr is 2.05 times less risky than VersaBank. It trades about 0.08 of its potential returns per unit of risk. VersaBank is currently generating about -0.05 per unit of risk. If you would invest  4,092  in Andlauer Healthcare Gr on September 27, 2024 and sell it today you would earn a total of  192.00  from holding Andlauer Healthcare Gr or generate 4.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Andlauer Healthcare Gr  vs.  VersaBank

Andlauer Healthcare

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Andlauer Healthcare Gr are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Andlauer Healthcare may actually be approaching a critical reversion point that can send shares even higher in January 2025.

VersaBank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in VersaBank are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VersaBank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Andlauer Healthcare and VersaBank

The main advantage of trading using opposite Andlauer Healthcare and VersaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andlauer Healthcare position performs unexpectedly, VersaBank 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 VersaBank will offset losses from the drop in VersaBank's long position.

The idea behind Andlauer Healthcare Gr and VersaBank pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.