Correlation Between Autocanada and Guru Organic
Can any of the company-specific risk be diversified away by investing in both Autocanada and Guru Organic 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 Guru Organic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocanada and Guru Organic Energy, you can compare the effects of market volatilities on Autocanada and Guru Organic 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 Guru Organic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocanada and Guru Organic.
Diversification Opportunities for Autocanada and Guru Organic
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Autocanada and Guru is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Guru Organic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guru Organic Energy 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 Guru Organic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guru Organic Energy has no effect on the direction of Autocanada i.e., Autocanada and Guru Organic go up and down completely randomly.
Pair Corralation between Autocanada and Guru Organic
Assuming the 90 days trading horizon Autocanada is expected to generate 1.63 times more return on investment than Guru Organic. However, Autocanada is 1.63 times more volatile than Guru Organic Energy. It trades about 0.13 of its potential returns per unit of risk. Guru Organic Energy is currently generating about -0.11 per unit of risk. If you would invest 1,458 in Autocanada on August 28, 2024 and sell it today you would earn a total of 431.00 from holding Autocanada or generate 29.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autocanada vs. Guru Organic Energy
Performance |
| Timeline |
| Autocanada |
| Guru Organic Energy |
Autocanada and Guru Organic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autocanada and Guru Organic
The main advantage of trading using opposite Autocanada and Guru Organic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocanada position performs unexpectedly, Guru Organic 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 Guru Organic will offset losses from the drop in Guru Organic'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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