Correlation Between Fiera Capital and Dominion Lending

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Can any of the company-specific risk be diversified away by investing in both Fiera Capital and Dominion Lending 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 Fiera Capital and Dominion Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fiera Capital and Dominion Lending Centres, you can compare the effects of market volatilities on Fiera Capital and Dominion Lending 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 Fiera Capital with a short position of Dominion Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fiera Capital and Dominion Lending.

Diversification Opportunities for Fiera Capital and Dominion Lending

0.32
  Correlation Coefficient

Weak diversification

The 3 months correlation between Fiera and Dominion is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fiera Capital and Dominion Lending Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Lending Centres and Fiera Capital 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 Fiera Capital are associated (or correlated) with Dominion Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Lending Centres has no effect on the direction of Fiera Capital i.e., Fiera Capital and Dominion Lending go up and down completely randomly.

Pair Corralation between Fiera Capital and Dominion Lending

Assuming the 90 days trading horizon Fiera Capital is expected to under-perform the Dominion Lending. But the stock apears to be less risky and, when comparing its historical volatility, Fiera Capital is 1.18 times less risky than Dominion Lending. The stock trades about -0.04 of its potential returns per unit of risk. The Dominion Lending Centres is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  525.00  in Dominion Lending Centres on October 6, 2024 and sell it today you would earn a total of  275.00  from holding Dominion Lending Centres or generate 52.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Fiera Capital  vs.  Dominion Lending Centres

 Performance 
       Timeline  
Fiera Capital 

Risk-Adjusted Performance

4 of 100

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

Risk-Adjusted Performance

23 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Dominion Lending Centres are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dominion Lending displayed solid returns over the last few months and may actually be approaching a breakup point.

Fiera Capital and Dominion Lending Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Fiera Capital and Dominion Lending

The main advantage of trading using opposite Fiera Capital and Dominion Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiera Capital position performs unexpectedly, Dominion Lending 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 Dominion Lending will offset losses from the drop in Dominion Lending's long position.
The idea behind Fiera Capital and Dominion Lending Centres 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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