Correlation Between Harvest Global and Desjardins
Can any of the company-specific risk be diversified away by investing in both Harvest Global and Desjardins 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 Harvest Global and Desjardins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Harvest Global REIT and Desjardins RI Active, you can compare the effects of market volatilities on Harvest Global and Desjardins 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 Harvest Global with a short position of Desjardins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Harvest Global and Desjardins.
Diversification Opportunities for Harvest Global and Desjardins
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Harvest and Desjardins is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Harvest Global REIT and Desjardins RI Active in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Desjardins RI Active and Harvest 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 Harvest Global REIT are associated (or correlated) with Desjardins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Desjardins RI Active has no effect on the direction of Harvest Global i.e., Harvest Global and Desjardins go up and down completely randomly.
Pair Corralation between Harvest Global and Desjardins
Assuming the 90 days trading horizon Harvest Global REIT is expected to under-perform the Desjardins. In addition to that, Harvest Global is 2.17 times more volatile than Desjardins RI Active. It trades about -0.09 of its total potential returns per unit of risk. Desjardins RI Active is currently generating about 0.06 per unit of volatility. If you would invest 1,884 in Desjardins RI Active on September 10, 2024 and sell it today you would earn a total of 25.00 from holding Desjardins RI Active or generate 1.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Harvest Global REIT vs. Desjardins RI Active
Performance |
Timeline |
Harvest Global REIT |
Desjardins RI Active |
Harvest Global and Desjardins Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Harvest Global and Desjardins
The main advantage of trading using opposite Harvest Global and Desjardins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Harvest Global position performs unexpectedly, Desjardins 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 Desjardins will offset losses from the drop in Desjardins' long position.Harvest Global vs. Harvest Equal Weight | Harvest Global vs. Harvest Brand Leaders | Harvest Global vs. Energy Leaders Plus | Harvest Global vs. Harvest Tech Achievers |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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