Correlation Between Canaf Investments and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Forsys Metals 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 Forsys Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Forsys Metals Corp, you can compare the effects of market volatilities on Canaf Investments and Forsys Metals 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 Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Forsys Metals.
Diversification Opportunities for Canaf Investments and Forsys Metals
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canaf and Forsys is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals 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 Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Canaf Investments i.e., Canaf Investments and Forsys Metals go up and down completely randomly.
Pair Corralation between Canaf Investments and Forsys Metals
Assuming the 90 days horizon Canaf Investments is expected to generate 1.83 times less return on investment than Forsys Metals. But when comparing it to its historical volatility, Canaf Investments is 1.97 times less risky than Forsys Metals. It trades about 0.13 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 66.00 in Forsys Metals Corp on October 9, 2024 and sell it today you would earn a total of 7.00 from holding Forsys Metals Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Forsys Metals Corp
Performance |
| Timeline |
| Canaf Investments |
| Forsys Metals Corp |
Canaf Investments and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Forsys Metals
The main advantage of trading using opposite Canaf Investments and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| Canaf Investments vs. Economic Investment Trust | Canaf Investments vs. Westshore Terminals Investment | Canaf Investments vs. Verizon Communications CDR | Canaf Investments vs. InPlay Oil Corp |
| Forsys Metals vs. Laramide Resources | Forsys Metals vs. enCore Energy Corp | Forsys Metals vs. CanAlaska Uranium | Forsys Metals vs. Anfield Resources |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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