Correlation Between Canaf Investments and North American
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and North American 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 North American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and North American Financial, you can compare the effects of market volatilities on Canaf Investments and North American 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 North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and North American.
Diversification Opportunities for Canaf Investments and North American
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canaf and North is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial 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 North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of Canaf Investments i.e., Canaf Investments and North American go up and down completely randomly.
Pair Corralation between Canaf Investments and North American
Assuming the 90 days horizon Canaf Investments is expected to under-perform the North American. In addition to that, Canaf Investments is 2.09 times more volatile than North American Financial. It trades about -0.07 of its total potential returns per unit of risk. North American Financial is currently generating about 0.37 per unit of volatility. If you would invest 639.00 in North American Financial on September 4, 2024 and sell it today you would earn a total of 93.00 from holding North American Financial or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canaf Investments vs. North American Financial
Performance |
| Timeline |
| Canaf Investments |
| North American Financial |
Canaf Investments and North American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and North American
The main advantage of trading using opposite Canaf Investments and North American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, North American 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 North American will offset losses from the drop in North American's long position.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper Corp |
| North American vs. Dividend Growth Split | North American vs. Dividend 15 Split | North American vs. Financial 15 Split | North American vs. Dividend 15 Split |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |