Correlation Between VersaBank and INTEL CDR
Can any of the company-specific risk be diversified away by investing in both VersaBank and INTEL CDR 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 INTEL CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VersaBank and INTEL CDR, you can compare the effects of market volatilities on VersaBank and INTEL CDR 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 INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of VersaBank and INTEL CDR.
Diversification Opportunities for VersaBank and INTEL CDR
Modest diversification
The 3 months correlation between VersaBank and INTEL is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding VersaBank and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of VersaBank i.e., VersaBank and INTEL CDR go up and down completely randomly.
Pair Corralation between VersaBank and INTEL CDR
Assuming the 90 days trading horizon VersaBank is expected to generate 1.54 times more return on investment than INTEL CDR. However, VersaBank is 1.54 times more volatile than INTEL CDR. It trades about -0.22 of its potential returns per unit of risk. INTEL CDR is currently generating about -0.36 per unit of risk. If you would invest 2,364 in VersaBank on September 19, 2024 and sell it today you would lose (417.00) from holding VersaBank or give up 17.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
VersaBank vs. INTEL CDR
Performance |
Timeline |
VersaBank |
INTEL CDR |
VersaBank and INTEL CDR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VersaBank and INTEL CDR
The main advantage of trading using opposite VersaBank and INTEL CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VersaBank position performs unexpectedly, INTEL CDR 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 INTEL CDR will offset losses from the drop in INTEL CDR's long position.VersaBank vs. Sylogist | VersaBank vs. Sangoma Technologies Corp | VersaBank vs. Firan Technology Group | VersaBank vs. iShares Canadian HYBrid |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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