Correlation Between Autocanada and Element Fleet
Can any of the company-specific risk be diversified away by investing in both Autocanada and Element Fleet 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 Element Fleet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocanada and Element Fleet Management, you can compare the effects of market volatilities on Autocanada and Element Fleet 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 Element Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocanada and Element Fleet.
Diversification Opportunities for Autocanada and Element Fleet
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Autocanada and Element is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management 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 Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of Autocanada i.e., Autocanada and Element Fleet go up and down completely randomly.
Pair Corralation between Autocanada and Element Fleet
Assuming the 90 days trading horizon Autocanada is expected to under-perform the Element Fleet. In addition to that, Autocanada is 2.55 times more volatile than Element Fleet Management. It trades about -0.01 of its total potential returns per unit of risk. Element Fleet Management is currently generating about 0.13 per unit of volatility. If you would invest 2,255 in Element Fleet Management on August 28, 2024 and sell it today you would earn a total of 761.00 from holding Element Fleet Management or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autocanada vs. Element Fleet Management
Performance |
| Timeline |
| Autocanada |
| Element Fleet Management |
Autocanada and Element Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autocanada and Element Fleet
The main advantage of trading using opposite Autocanada and Element Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocanada position performs unexpectedly, Element Fleet 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 Element Fleet will offset losses from the drop in Element Fleet's long position.| Autocanada vs. Martinrea International | Autocanada vs. Linamar | Autocanada vs. NFI Group | Autocanada vs. Element Fleet Management |
| Element Fleet vs. ECN Capital Corp | Element Fleet vs. Martinrea International | Element Fleet vs. CCL Industries | Element Fleet vs. FirstService 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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