Correlation Between CCL Industries and Gran Tierra
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Gran Tierra 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 CCL Industries and Gran Tierra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Gran Tierra Energy, you can compare the effects of market volatilities on CCL Industries and Gran Tierra 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 CCL Industries with a short position of Gran Tierra. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Gran Tierra.
Diversification Opportunities for CCL Industries and Gran Tierra
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CCL and Gran is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Gran Tierra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gran Tierra Energy and CCL Industries 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 CCL Industries are associated (or correlated) with Gran Tierra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gran Tierra Energy has no effect on the direction of CCL Industries i.e., CCL Industries and Gran Tierra go up and down completely randomly.
Pair Corralation between CCL Industries and Gran Tierra
Assuming the 90 days trading horizon CCL Industries is expected to under-perform the Gran Tierra. But the stock apears to be less risky and, when comparing its historical volatility, CCL Industries is 2.32 times less risky than Gran Tierra. The stock trades about -0.23 of its potential returns per unit of risk. The Gran Tierra Energy is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 877.00 in Gran Tierra Energy on August 30, 2024 and sell it today you would earn a total of 70.00 from holding Gran Tierra Energy or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CCL Industries vs. Gran Tierra Energy
Performance |
| Timeline |
| CCL Industries |
| Gran Tierra Energy |
CCL Industries and Gran Tierra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Gran Tierra
The main advantage of trading using opposite CCL Industries and Gran Tierra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Gran Tierra 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 Gran Tierra will offset losses from the drop in Gran Tierra's long position.| CCL Industries vs. CCL Industries | CCL Industries vs. Quebecor | CCL Industries vs. Winpak | CCL Industries vs. Restaurant Brands International |
| Gran Tierra vs. NuVista Energy | Gran Tierra vs. Surge Energy | Gran Tierra vs. Birchcliff Energy | Gran Tierra vs. Kelt Exploration |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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