Correlation Between Canaf Investments and Acadian Timber
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Acadian Timber 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 Canaf Investments and Acadian Timber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Acadian Timber Corp, you can compare the effects of market volatilities on Canaf Investments and Acadian Timber 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 Canaf Investments with a short position of Acadian Timber. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Acadian Timber.
Diversification Opportunities for Canaf Investments and Acadian Timber
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canaf and Acadian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Acadian Timber Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Timber Corp and Canaf Investments 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 Canaf Investments are associated (or correlated) with Acadian Timber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Timber Corp has no effect on the direction of Canaf Investments i.e., Canaf Investments and Acadian Timber go up and down completely randomly.
Pair Corralation between Canaf Investments and Acadian Timber
Assuming the 90 days horizon Canaf Investments is expected to under-perform the Acadian Timber. In addition to that, Canaf Investments is 4.25 times more volatile than Acadian Timber Corp. It trades about -0.07 of its total potential returns per unit of risk. Acadian Timber Corp is currently generating about 0.03 per unit of volatility. If you would invest 1,764 in Acadian Timber Corp on September 3, 2024 and sell it today you would earn a total of 9.00 from holding Acadian Timber Corp or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Acadian Timber Corp
Performance |
| Timeline |
| Canaf Investments |
| Acadian Timber Corp |
Canaf Investments and Acadian Timber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Acadian Timber
The main advantage of trading using opposite Canaf Investments and Acadian Timber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Acadian Timber 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 Acadian Timber will offset losses from the drop in Acadian Timber's long position.| Canaf Investments vs. Ocumetics Technology Corp | Canaf Investments vs. Constellation Software | Canaf Investments vs. Datable Technology Corp | Canaf Investments vs. Profound Medical Corp |
| Acadian Timber vs. InPlay Oil Corp | Acadian Timber vs. Bausch Health Companies | Acadian Timber vs. Arbor Metals Corp | Acadian Timber vs. Metalero Mining 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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