Correlation Between Canaf Investments and Sparx Technology
Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Sparx Technology 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 Sparx Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and Sparx Technology, you can compare the effects of market volatilities on Canaf Investments and Sparx Technology 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 Sparx Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Sparx Technology.
Diversification Opportunities for Canaf Investments and Sparx Technology
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canaf and Sparx is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Sparx Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparx Technology 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 Sparx Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparx Technology has no effect on the direction of Canaf Investments i.e., Canaf Investments and Sparx Technology go up and down completely randomly.
Pair Corralation between Canaf Investments and Sparx Technology
Assuming the 90 days horizon Canaf Investments is expected to generate 0.79 times more return on investment than Sparx Technology. However, Canaf Investments is 1.26 times less risky than Sparx Technology. It trades about 0.34 of its potential returns per unit of risk. Sparx Technology is currently generating about -0.04 per unit of risk. If you would invest 31.00 in Canaf Investments on November 4, 2024 and sell it today you would earn a total of 8.00 from holding Canaf Investments or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Canaf Investments vs. Sparx Technology
Performance |
| Timeline |
| Canaf Investments |
| Sparx Technology |
Canaf Investments and Sparx Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and Sparx Technology
The main advantage of trading using opposite Canaf Investments and Sparx Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments position performs unexpectedly, Sparx Technology 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 Sparx Technology will offset losses from the drop in Sparx Technology's long position.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Flinders Resources Limited | Canaf Investments vs. Orezone Gold Corp |
| Sparx Technology vs. DRI Healthcare Trust | Sparx Technology vs. iA Financial | Sparx Technology vs. Canso Credit Trust | Sparx Technology vs. Nova Leap Health |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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