Correlation Between Laurentian Bank and Nutrien
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank and Nutrien 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 Nutrien into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and Nutrien, you can compare the effects of market volatilities on Laurentian Bank and Nutrien 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 Nutrien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and Nutrien.
Diversification Opportunities for Laurentian Bank and Nutrien
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Laurentian and Nutrien is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien 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 Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and Nutrien go up and down completely randomly.
Pair Corralation between Laurentian Bank and Nutrien
Assuming the 90 days horizon Laurentian Bank is expected to generate 0.71 times more return on investment than Nutrien. However, Laurentian Bank is 1.4 times less risky than Nutrien. It trades about 0.26 of its potential returns per unit of risk. Nutrien is currently generating about 0.12 per unit of risk. If you would invest 2,649 in Laurentian Bank on April 24, 2025 and sell it today you would earn a total of 440.00 from holding Laurentian Bank or generate 16.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Laurentian Bank vs. Nutrien
Performance |
Timeline |
Laurentian Bank |
Nutrien |
Laurentian Bank and Nutrien Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Laurentian Bank and Nutrien
The main advantage of trading using opposite Laurentian Bank and Nutrien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank position performs unexpectedly, Nutrien 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 Nutrien will offset losses from the drop in Nutrien's long position.Laurentian Bank vs. EQB Inc | Laurentian Bank vs. VersaBank | Laurentian Bank vs. Laurentian Bank of | Laurentian Bank vs. National Bank of |
Nutrien vs. VIP Entertainment Technologies | Nutrien vs. Canso Credit Trust | Nutrien vs. Identillect Technologies Corp | Nutrien vs. Theralase Technologies |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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