Correlation Between Canaf Investments and Black Widow
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Black Widow 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 Black Widow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Black Widow Resources, you can compare the effects of market volatilities on Canaf Investments and Black Widow 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 Black Widow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Black Widow.
Diversification Opportunities for Canaf Investments and Black Widow
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canaf and Black is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Black Widow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Widow Resources 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 Black Widow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Widow Resources has no effect on the direction of Canaf Investments i.e., Canaf Investments and Black Widow go up and down completely randomly.
Pair Corralation between Canaf Investments and Black Widow
Assuming the 90 days horizon Canaf Investments is expected to generate 0.4 times more return on investment than Black Widow. However, Canaf Investments is 2.49 times less risky than Black Widow. It trades about 0.11 of its potential returns per unit of risk. Black Widow Resources is currently generating about 0.03 per unit of risk. If you would invest 17.00 in Canaf Investments on November 5, 2024 and sell it today you would earn a total of 22.00 from holding Canaf Investments or generate 129.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canaf Investments vs. Black Widow Resources
Performance |
| Timeline |
| Canaf Investments |
| Black Widow Resources |
Canaf Investments and Black Widow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Black Widow
The main advantage of trading using opposite Canaf Investments and Black Widow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Black Widow 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 Black Widow will offset losses from the drop in Black Widow's long position.| Canaf Investments vs. Richelieu Hardware | Canaf Investments vs. T2 Metals Corp | Canaf Investments vs. Datable Technology Corp | Canaf Investments vs. Ramp Metals |
| Black Widow vs. Cogeco Communications | Black Widow vs. Magna Mining | Black Widow vs. Nicola Mining | Black Widow vs. Slate Grocery REIT |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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