Correlation Between BCE and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both BCE and Canlan Ice 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 BCE and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BCE Inc and Canlan Ice Sports, you can compare the effects of market volatilities on BCE and Canlan Ice 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 BCE with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and Canlan Ice.
Diversification Opportunities for BCE and Canlan Ice
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BCE and Canlan is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and BCE 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 BCE Inc are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of BCE i.e., BCE and Canlan Ice go up and down completely randomly.
Pair Corralation between BCE and Canlan Ice
If you would invest 297.00 in Canlan Ice Sports on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Canlan Ice Sports or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BCE Inc vs. Canlan Ice Sports
Performance |
| Timeline |
| BCE Inc |
| Canlan Ice Sports |
BCE and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and Canlan Ice
The main advantage of trading using opposite BCE and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.The idea behind BCE Inc and Canlan Ice Sports pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Canlan Ice vs. Oriental Land Co | Canlan Ice vs. Oriental Land Co | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products |
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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