Correlation Between Indutrade and Canadian General
Can any of the company-specific risk be diversified away by investing in both Indutrade and Canadian General 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 Indutrade and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indutrade AB and Canadian General Investments, you can compare the effects of market volatilities on Indutrade and Canadian General 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 Indutrade with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indutrade and Canadian General.
Diversification Opportunities for Indutrade and Canadian General
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Indutrade and Canadian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Indutrade AB and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Indutrade 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 Indutrade AB are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Indutrade i.e., Indutrade and Canadian General go up and down completely randomly.
Pair Corralation between Indutrade and Canadian General
Assuming the 90 days trading horizon Indutrade AB is expected to generate 0.8 times more return on investment than Canadian General. However, Indutrade AB is 1.26 times less risky than Canadian General. It trades about 0.25 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.08 per unit of risk. If you would invest 27,690 in Indutrade AB on November 1, 2024 and sell it today you would earn a total of 2,480 from holding Indutrade AB or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Indutrade AB vs. Canadian General Investments
Performance |
| Timeline |
| Indutrade AB |
| Canadian General Inv |
Indutrade and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indutrade and Canadian General
The main advantage of trading using opposite Indutrade and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indutrade position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Indutrade vs. Berkshire Hathaway | Indutrade vs. Samsung Electronics Co | Indutrade vs. Samsung Electronics Co | Indutrade vs. Chocoladefabriken Lindt Spruengli |
| Canadian General vs. Costco Wholesale Corp | Canadian General vs. Indutrade AB | Canadian General vs. Ondine Biomedical | Canadian General vs. National Beverage Corp |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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