Correlation Between Brompton Split and Dominion Lending

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

By analyzing existing cross correlation between Brompton Split Banc and Dominion Lending Centres, you can compare the effects of market volatilities on Brompton Split and Dominion Lending 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 Brompton Split with a short position of Dominion Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Split and Dominion Lending.

Diversification Opportunities for Brompton Split and Dominion Lending

0.46

Correlation Coefficient

Brompton Split  Dominion Lending

Very weak diversification

The 3 months correlation between Brompton and Dominion is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Split Banc and Dominion Lending Centres in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominion Lending Centres and Brompton Split 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 Brompton Split Banc are associated (or correlated) with Dominion Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominion Lending Centres has no effect on the direction of Brompton Split i.e., Brompton Split and Dominion Lending go up and down completely randomly.

Pair Corralation between Brompton Split and Dominion Lending

Assuming the 90 days trading horizon Brompton Split Banc is expected to generate 0.49 times more return on investment than Dominion Lending. However, Brompton Split Banc is 2.04 times less risky than Dominion Lending. It trades about 0.49 of its potential returns per unit of risk. Dominion Lending Centres is currently generating about 0.09 per unit of risk. If you would invest  850.00  in Brompton Split Banc on April 20, 2025 and sell it today you would earn a total of  251.00  from holding Brompton Split Banc or generate 29.53% return on investment over 90 days.

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

Brompton Split Banc  vs.  Dominion Lending Centres

Brompton Split Banc

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Split Banc are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Brompton Split displayed solid returns over the last few months and may actually be approaching a breakup point.

Dominion Lending Centres

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dominion Lending Centres are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Dominion Lending may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Brompton Split and Dominion Lending

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

The idea behind Brompton Split Banc and Dominion Lending Centres 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.