Correlation Between Laurentian Bank and Mainstreet Equity
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank and Mainstreet Equity 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 Laurentian Bank and Mainstreet Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and Mainstreet Equity Corp, you can compare the effects of market volatilities on Laurentian Bank and Mainstreet Equity 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 Laurentian Bank with a short position of Mainstreet Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and Mainstreet Equity.
Diversification Opportunities for Laurentian Bank and Mainstreet Equity
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Laurentian and Mainstreet is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and Mainstreet Equity Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstreet Equity Corp and Laurentian Bank 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 Laurentian Bank are associated (or correlated) with Mainstreet Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstreet Equity Corp has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and Mainstreet Equity go up and down completely randomly.
Pair Corralation between Laurentian Bank and Mainstreet Equity
Assuming the 90 days horizon Laurentian Bank is expected to generate 1.07 times more return on investment than Mainstreet Equity. However, Laurentian Bank is 1.07 times more volatile than Mainstreet Equity Corp. It trades about 0.13 of its potential returns per unit of risk. Mainstreet Equity Corp is currently generating about -0.11 per unit of risk. If you would invest 3,035 in Laurentian Bank on August 13, 2025 and sell it today you would earn a total of 282.00 from holding Laurentian Bank or generate 9.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laurentian Bank vs. Mainstreet Equity Corp
Performance |
| Timeline |
| Laurentian Bank |
| Mainstreet Equity Corp |
Laurentian Bank and Mainstreet Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laurentian Bank and Mainstreet Equity
The main advantage of trading using opposite Laurentian Bank and Mainstreet Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank position performs unexpectedly, Mainstreet Equity 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 Mainstreet Equity will offset losses from the drop in Mainstreet Equity's long position.| Laurentian Bank vs. Guardian Capital Group | Laurentian Bank vs. Guardian Capital Group | Laurentian Bank vs. Uniteds Limited | Laurentian Bank vs. Canaccord Genuity Group |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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