Correlation Between Autocanada and Else Nutrition
Can any of the company-specific risk be diversified away by investing in both Autocanada and Else Nutrition 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 Autocanada and Else Nutrition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocanada and Else Nutrition Holdings, you can compare the effects of market volatilities on Autocanada and Else Nutrition 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 Autocanada with a short position of Else Nutrition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocanada and Else Nutrition.
Diversification Opportunities for Autocanada and Else Nutrition
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autocanada and Else is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Else Nutrition Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Else Nutrition Holdings and Autocanada 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 Autocanada are associated (or correlated) with Else Nutrition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Else Nutrition Holdings has no effect on the direction of Autocanada i.e., Autocanada and Else Nutrition go up and down completely randomly.
Pair Corralation between Autocanada and Else Nutrition
Assuming the 90 days trading horizon Autocanada is expected to generate 0.42 times more return on investment than Else Nutrition. However, Autocanada is 2.4 times less risky than Else Nutrition. It trades about -0.01 of its potential returns per unit of risk. Else Nutrition Holdings is currently generating about -0.11 per unit of risk. If you would invest 2,281 in Autocanada on September 3, 2024 and sell it today you would lose (402.00) from holding Autocanada or give up 17.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autocanada vs. Else Nutrition Holdings
Performance |
| Timeline |
| Autocanada |
| Else Nutrition Holdings |
Autocanada and Else Nutrition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autocanada and Else Nutrition
The main advantage of trading using opposite Autocanada and Else Nutrition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocanada position performs unexpectedly, Else Nutrition 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 Else Nutrition will offset losses from the drop in Else Nutrition's long position.| Autocanada vs. Martinrea International | Autocanada vs. Linamar | Autocanada vs. NFI Group | Autocanada vs. Element Fleet Management |
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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