Correlation Between Dream Industrial and Laurentian Bank
Can any of the company-specific risk be diversified away by investing in both Dream Industrial and Laurentian Bank 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 Dream Industrial and Laurentian Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dream Industrial Real and Laurentian Bank of, you can compare the effects of market volatilities on Dream Industrial and Laurentian Bank 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 Dream Industrial with a short position of Laurentian Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dream Industrial and Laurentian Bank.
Diversification Opportunities for Dream Industrial and Laurentian Bank
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dream and Laurentian is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dream Industrial Real and Laurentian Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laurentian Bank and Dream Industrial 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 Dream Industrial Real are associated (or correlated) with Laurentian Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laurentian Bank has no effect on the direction of Dream Industrial i.e., Dream Industrial and Laurentian Bank go up and down completely randomly.
Pair Corralation between Dream Industrial and Laurentian Bank
Assuming the 90 days trading horizon Dream Industrial is expected to generate 1.0 times less return on investment than Laurentian Bank. In addition to that, Dream Industrial is 1.85 times more volatile than Laurentian Bank of. It trades about 0.19 of its total potential returns per unit of risk. Laurentian Bank of is currently generating about 0.35 per unit of volatility. If you would invest 2,025 in Laurentian Bank of on April 23, 2025 and sell it today you would earn a total of 309.00 from holding Laurentian Bank of or generate 15.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Dream Industrial Real vs. Laurentian Bank of
Performance |
Timeline |
Dream Industrial Real |
Laurentian Bank |
Dream Industrial and Laurentian Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dream Industrial and Laurentian Bank
The main advantage of trading using opposite Dream Industrial and Laurentian Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dream Industrial position performs unexpectedly, Laurentian Bank 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 Laurentian Bank will offset losses from the drop in Laurentian Bank's long position.Dream Industrial vs. Granite Real Estate | Dream Industrial vs. NorthWest Healthcare Properties | Dream Industrial vs. Choice Properties Real | Dream Industrial vs. Canadian Apartment Properties |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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