Correlation Between Canaan and Artificial Intelligence
Can any of the company-specific risk be diversified away by investing in both Canaan and Artificial Intelligence 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 Canaan and Artificial Intelligence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaan Inc and Artificial Intelligence Technology, you can compare the effects of market volatilities on Canaan and Artificial Intelligence 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 Canaan with a short position of Artificial Intelligence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaan and Artificial Intelligence.
Diversification Opportunities for Canaan and Artificial Intelligence
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canaan and Artificial is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Canaan Inc and Artificial Intelligence Techno in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artificial Intelligence and Canaan 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 Canaan Inc are associated (or correlated) with Artificial Intelligence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artificial Intelligence has no effect on the direction of Canaan i.e., Canaan and Artificial Intelligence go up and down completely randomly.
Pair Corralation between Canaan and Artificial Intelligence
Considering the 90-day investment horizon Canaan Inc is expected to generate 1.51 times more return on investment than Artificial Intelligence. However, Canaan is 1.51 times more volatile than Artificial Intelligence Technology. It trades about 0.24 of its potential returns per unit of risk. Artificial Intelligence Technology is currently generating about 0.09 per unit of risk. If you would invest 106.00 in Canaan Inc on August 29, 2024 and sell it today you would earn a total of 76.00 from holding Canaan Inc or generate 71.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaan Inc vs. Artificial Intelligence Techno
Performance |
| Timeline |
| Canaan Inc |
| Artificial Intelligence |
Canaan and Artificial Intelligence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaan and Artificial Intelligence
The main advantage of trading using opposite Canaan and Artificial Intelligence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaan position performs unexpectedly, Artificial Intelligence 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 Artificial Intelligence will offset losses from the drop in Artificial Intelligence's long position.| Canaan vs. 3D Systems | Canaan vs. NetApp Inc | Canaan vs. Rigetti Computing | Canaan vs. Logitech International SA |
| Artificial Intelligence vs. Rigetti Computing | Artificial Intelligence vs. Quantum Computing | Artificial Intelligence vs. IONQ Inc | Artificial Intelligence vs. Desktop Metal |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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