Correlation Between Altus Group and Pender Growth
Can any of the company-specific risk be diversified away by investing in both Altus Group and Pender Growth 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 Altus Group and Pender Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altus Group Limited and Pender Growth, you can compare the effects of market volatilities on Altus Group and Pender Growth 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 Altus Group with a short position of Pender Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altus Group and Pender Growth.
Diversification Opportunities for Altus Group and Pender Growth
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Altus and Pender is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Altus Group Limited and Pender Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pender Growth and Altus Group 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 Altus Group Limited are associated (or correlated) with Pender Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pender Growth has no effect on the direction of Altus Group i.e., Altus Group and Pender Growth go up and down completely randomly.
Pair Corralation between Altus Group and Pender Growth
Assuming the 90 days trading horizon Altus Group is expected to generate 2.59 times less return on investment than Pender Growth. But when comparing it to its historical volatility, Altus Group Limited is 1.52 times less risky than Pender Growth. It trades about 0.03 of its potential returns per unit of risk. Pender Growth is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 714.00 in Pender Growth on September 3, 2024 and sell it today you would earn a total of 403.00 from holding Pender Growth or generate 56.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Altus Group Limited vs. Pender Growth
Performance |
| Timeline |
| Altus Group Limited |
| Pender Growth |
Altus Group and Pender Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altus Group and Pender Growth
The main advantage of trading using opposite Altus Group and Pender Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altus Group position performs unexpectedly, Pender Growth 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 Pender Growth will offset losses from the drop in Pender Growth's long position.| Altus Group vs. Colliers International Group | Altus Group vs. FirstService Corp | Altus Group vs. Winpak | Altus Group vs. Ritchie Bros Auctioneers |
| Pender Growth vs. Colliers International Group | Pender Growth vs. Altus Group Limited | Pender Growth vs. Harvest Global REIT | Pender Growth vs. International Zeolite 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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