Correlation Between Canaf Investments and Russel Metals
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Russel 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 Russel 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 Russel Metals, you can compare the effects of market volatilities on Canaf Investments and Russel 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 Russel Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Russel Metals.
Diversification Opportunities for Canaf Investments and Russel Metals
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canaf and Russel is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Russel Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Russel Metals 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 Russel Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russel Metals has no effect on the direction of Canaf Investments i.e., Canaf Investments and Russel Metals go up and down completely randomly.
Pair Corralation between Canaf Investments and Russel Metals
Assuming the 90 days horizon Canaf Investments is expected to generate 2.24 times more return on investment than Russel Metals. However, Canaf Investments is 2.24 times more volatile than Russel Metals. It trades about 0.09 of its potential returns per unit of risk. Russel Metals is currently generating about 0.04 per unit of risk. If you would invest 11.00 in Canaf Investments on November 2, 2024 and sell it today you would earn a total of 29.00 from holding Canaf Investments or generate 263.64% 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. Russel Metals
Performance |
| Timeline |
| Canaf Investments |
| Russel Metals |
Canaf Investments and Russel Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Russel Metals
The main advantage of trading using opposite Canaf Investments and Russel Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Russel 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 Russel Metals will offset losses from the drop in Russel Metals' long position.| Canaf Investments vs. Dream Industrial Real | Canaf Investments vs. Western Copper and | Canaf Investments vs. Magna Mining | Canaf Investments vs. Metalero Mining Corp |
| Russel Metals vs. Finning International | Russel Metals vs. Transcontinental | Russel Metals vs. Toromont Industries | Russel Metals vs. IGM Financial |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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