Correlation Between SPTSX Dividend and Tamarack Valley

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Can any of the company-specific risk be diversified away by investing in both SPTSX Dividend and Tamarack Valley 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 Tamarack Valley 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 Tamarack Valley Energy, you can compare the effects of market volatilities on SPTSX Dividend and Tamarack Valley 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 Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPTSX Dividend and Tamarack Valley.

Diversification Opportunities for SPTSX Dividend and Tamarack Valley

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between SPTSX and Tamarack is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding SPTSX Dividend Aristocrats and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley Energy 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of SPTSX Dividend i.e., SPTSX Dividend and Tamarack Valley go up and down completely randomly.
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Pair Corralation between SPTSX Dividend and Tamarack Valley

Assuming the 90 days trading horizon SPTSX Dividend is expected to generate 3.19 times less return on investment than Tamarack Valley. But when comparing it to its historical volatility, SPTSX Dividend Aristocrats is 4.73 times less risky than Tamarack Valley. It trades about 0.19 of its potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  534.00  in Tamarack Valley Energy on August 6, 2025 and sell it today you would earn a total of  77.00  from holding Tamarack Valley Energy or generate 14.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.41%
ValuesDaily Returns

SPTSX Dividend Aristocrats  vs.  Tamarack Valley Energy

 Performance 
       Timeline  

SPTSX Dividend and Tamarack Valley Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with SPTSX Dividend and Tamarack Valley

The main advantage of trading using opposite SPTSX Dividend and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPTSX Dividend position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley's long position.
The idea behind SPTSX Dividend Aristocrats and Tamarack Valley Energy 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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