Correlation Between Canaf Investments and Rocky Mountain
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Rocky Mountain 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 Rocky Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Rocky Mountain Liquor, you can compare the effects of market volatilities on Canaf Investments and Rocky Mountain 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 Rocky Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Rocky Mountain.
Diversification Opportunities for Canaf Investments and Rocky Mountain
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canaf and Rocky is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Rocky Mountain Liquor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Liquor 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 Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Liquor has no effect on the direction of Canaf Investments i.e., Canaf Investments and Rocky Mountain go up and down completely randomly.
Pair Corralation between Canaf Investments and Rocky Mountain
Assuming the 90 days horizon Canaf Investments is expected to generate 0.63 times more return on investment than Rocky Mountain. However, Canaf Investments is 1.59 times less risky than Rocky Mountain. It trades about 0.09 of its potential returns per unit of risk. Rocky Mountain Liquor is currently generating about 0.01 per unit of risk. If you would invest 10.00 in Canaf Investments on October 10, 2024 and sell it today you would earn a total of 24.00 from holding Canaf Investments or generate 240.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. Rocky Mountain Liquor
Performance |
| Timeline |
| Canaf Investments |
| Rocky Mountain Liquor |
Canaf Investments and Rocky Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Rocky Mountain
The main advantage of trading using opposite Canaf Investments and Rocky Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Rocky Mountain 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 Rocky Mountain will offset losses from the drop in Rocky Mountain's long position.| Canaf Investments vs. Plaza Retail REIT | Canaf Investments vs. Westshore Terminals Investment | Canaf Investments vs. SPoT Coffee | Canaf Investments vs. Economic Investment Trust |
| Rocky Mountain vs. Marimaca Copper Corp | Rocky Mountain vs. Primaris Retail RE | Rocky Mountain vs. MTY Food Group | Rocky Mountain vs. Costco Wholesale 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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