Correlation Between SPTSX Dividend and Lysander Slater

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

By analyzing existing cross correlation between SPTSX Dividend Aristocrats and Lysander Slater Preferred Share, you can compare the effects of market volatilities on SPTSX Dividend and Lysander Slater 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 SPTSX Dividend with a short position of Lysander Slater. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and Lysander Slater.

Diversification Opportunities for SPTSX Dividend and Lysander Slater

-0.37

Correlation Coefficient

SPTSX Dividend  Lysander Slater

Very good diversification

The 3 months correlation between SPTSX and Lysander is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and Lysander Slater Preferred Shar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lysander Slater Pref and SPTSX Dividend 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 SPTSX Dividend Aristocrats are associated (or correlated) with Lysander Slater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lysander Slater Pref has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and Lysander Slater go up and down completely randomly.

Pair Corralation between SPTSX Dividend and Lysander Slater

Assuming the 90 days trading horizon SPTSX Dividend Aristocrats is expected to under-perform the Lysander Slater. In addition to that, SPTSX Dividend is 1.84 times more volatile than Lysander Slater Preferred Share. It trades about -0.02 of its total potential returns per unit of risk. Lysander Slater Preferred Share is currently generating about 0.15 per unit of volatility. If you would invest  962.00  in Lysander Slater Preferred Share on December 29, 2024 and sell it today you would earn a total of  28.00  from holding Lysander Slater Preferred Share or generate 2.91% return on investment over 90 days.

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

SPTSX Dividend Aristocrats  vs.  Lysander Slater Preferred Shar

Pair Trading with SPTSX Dividend and Lysander Slater

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

The idea behind SPTSX Dividend Aristocrats and Lysander Slater Preferred Share 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .