Correlation Between Alaska Energy and Canadian General
Can any of the company-specific risk be diversified away by investing in both Alaska Energy 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 Alaska Energy and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and Canadian General Investments, you can compare the effects of market volatilities on Alaska Energy 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 Alaska Energy with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and Canadian General.
Diversification Opportunities for Alaska Energy and Canadian General
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and Canadian is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals 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 Alaska Energy 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 Alaska Energy Metals 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 Alaska Energy i.e., Alaska Energy and Canadian General go up and down completely randomly.
Pair Corralation between Alaska Energy and Canadian General
Assuming the 90 days trading horizon Alaska Energy is expected to generate 1.48 times less return on investment than Canadian General. In addition to that, Alaska Energy is 7.76 times more volatile than Canadian General Investments. It trades about 0.01 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.06 per unit of volatility. If you would invest 3,050 in Canadian General Investments on August 31, 2024 and sell it today you would earn a total of 1,047 from holding Canadian General Investments or generate 34.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. Canadian General Investments
Performance |
| Timeline |
| Alaska Energy Metals |
| Canadian General Inv |
Alaska Energy and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and Canadian General
The main advantage of trading using opposite Alaska Energy and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy 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.| Alaska Energy vs. Ramp Metals | Alaska Energy vs. Canlan Ice Sports | Alaska Energy vs. Boat Rocker Media | Alaska Energy vs. Andlauer Healthcare Gr |
| Canadian General vs. iShares Canadian HYBrid | Canadian General vs. Brompton European Dividend | Canadian General vs. Solar Alliance Energy | Canadian General vs. PHN Multi Style All Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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