Correlation Between VersaBank and A W

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

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

Diversification Opportunities for VersaBank and A W

0.23

Correlation Coefficient

VersaBank  A W

Modest diversification

The 3 months correlation between VersaBank and A W is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and A W FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A W FOOD and VersaBank 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 VersaBank are associated (or correlated) with A W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A W FOOD has no effect on the direction of VersaBank i.e., VersaBank and A W go up and down completely randomly.

Pair Corralation between VersaBank and A W

Assuming the 90 days trading horizon VersaBank is expected to generate 1.44 times more return on investment than A W. However, VersaBank is 1.44 times more volatile than A W FOOD. It trades about 0.1 of its potential returns per unit of risk. A W FOOD is currently generating about -0.14 per unit of risk. If you would invest  988.00  in VersaBank on October 3, 2024 and sell it today you would earn a total of  986.00  from holding VersaBank or generate 99.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	13.98%
Values	Daily Returns

VersaBank  vs.  A W FOOD

VersaBank

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VersaBank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VersaBank displayed solid returns over the last few months and may actually be approaching a breakup point.

A W FOOD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A W FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with VersaBank and A W

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

The idea behind VersaBank and A W FOOD 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.