Correlation Between Apple CDR and Dollarama

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

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

Diversification Opportunities for Apple CDR and Dollarama

0.15

Correlation Coefficient

Apple CDR  Dollarama

Average diversification

The 3 months correlation between Apple and Dollarama is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Apple CDR and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and Apple CDR 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 Apple CDR are associated (or correlated) with Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of Apple CDR i.e., Apple CDR and Dollarama go up and down completely randomly.

Pair Corralation between Apple CDR and Dollarama

Assuming the 90 days trading horizon Apple CDR is expected to generate 2.09 times less return on investment than Dollarama. But when comparing it to its historical volatility, Apple CDR is 1.84 times less risky than Dollarama. It trades about 0.15 of its potential returns per unit of risk. Dollarama is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  17,534  in Dollarama on April 9, 2025 and sell it today you would earn a total of  1,412  from holding Dollarama or generate 8.05% return on investment over 90 days.

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

Apple CDR  vs.  Dollarama

Apple CDR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Apple CDR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Apple CDR is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Dollarama

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dollarama are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal essential indicators, Dollarama displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple CDR and Dollarama

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

The idea behind Apple CDR and Dollarama 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.