Correlation Between Alliance Data and STORAGEVAULT CANADA

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

By analyzing existing cross correlation between Alliance Data Systems and STORAGEVAULT CANADA INC, you can compare the effects of market volatilities on Alliance Data and STORAGEVAULT CANADA 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 Alliance Data with a short position of STORAGEVAULT CANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Data and STORAGEVAULT CANADA.

Diversification Opportunities for Alliance Data and STORAGEVAULT CANADA

0.53

Correlation Coefficient

Alliance Data  STORAGEVAULT CANADA

Very weak diversification

The 3 months correlation between Alliance and STORAGEVAULT is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Data Systems and STORAGEVAULT CANADA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORAGEVAULT CANADA INC and Alliance Data 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 Alliance Data Systems are associated (or correlated) with STORAGEVAULT CANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORAGEVAULT CANADA INC has no effect on the direction of Alliance Data i.e., Alliance Data and STORAGEVAULT CANADA go up and down completely randomly.

Pair Corralation between Alliance Data and STORAGEVAULT CANADA

Assuming the 90 days trading horizon Alliance Data Systems is expected to generate 1.55 times more return on investment than STORAGEVAULT CANADA. However, Alliance Data is 1.55 times more volatile than STORAGEVAULT CANADA INC. It trades about 0.04 of its potential returns per unit of risk. STORAGEVAULT CANADA INC is currently generating about 0.02 per unit of risk. If you would invest  4,557  in Alliance Data Systems on March 31, 2025 and sell it today you would earn a total of  232.00  from holding Alliance Data Systems or generate 5.09% return on investment over 90 days.

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

Alliance Data Systems  vs.  STORAGEVAULT CANADA INC

Alliance Data Systems

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alliance Data Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Alliance Data may actually be approaching a critical reversion point that can send shares even higher in July 2025.

STORAGEVAULT CANADA INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STORAGEVAULT CANADA INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, STORAGEVAULT CANADA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Alliance Data and STORAGEVAULT CANADA

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

The idea behind Alliance Data Systems and STORAGEVAULT CANADA INC 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.