Correlation Between Everyday People and VersaBank
Can any of the company-specific risk be diversified away by investing in both Everyday People 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 Everyday People and VersaBank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everyday People Financial and VersaBank, you can compare the effects of market volatilities on Everyday People 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 Everyday People with a short position of VersaBank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everyday People and VersaBank.
Diversification Opportunities for Everyday People and VersaBank
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Everyday and VersaBank is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Everyday People Financial and VersaBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VersaBank and Everyday People 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 Everyday People Financial 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 Everyday People i.e., Everyday People and VersaBank go up and down completely randomly.
Pair Corralation between Everyday People and VersaBank
Assuming the 90 days horizon Everyday People Financial is expected to generate 1.27 times more return on investment than VersaBank. However, Everyday People is 1.27 times more volatile than VersaBank. It trades about 0.13 of its potential returns per unit of risk. VersaBank is currently generating about 0.06 per unit of risk. If you would invest 39.00 in Everyday People Financial on September 25, 2024 and sell it today you would earn a total of 11.00 from holding Everyday People Financial or generate 28.21% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Everyday People Financial vs. VersaBank
Performance |
Timeline |
Everyday People Financial |
VersaBank |
Everyday People and VersaBank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Everyday People and VersaBank
The main advantage of trading using opposite Everyday People and VersaBank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everyday People 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.Everyday People vs. SalesforceCom CDR | Everyday People vs. Bip Investment Corp | Everyday People vs. Falcon Energy Materials | Everyday People vs. Brookfield Investments |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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