Correlation Between CCL Industries and Peyto ExplorationDevel
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Peyto ExplorationDevel 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 Peyto ExplorationDevel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Peyto ExplorationDevelopment Corp, you can compare the effects of market volatilities on CCL Industries and Peyto ExplorationDevel 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 Peyto ExplorationDevel. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Peyto ExplorationDevel.
Diversification Opportunities for CCL Industries and Peyto ExplorationDevel
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CCL and Peyto is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Peyto ExplorationDevelopment C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peyto ExplorationDevel 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 Peyto ExplorationDevel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peyto ExplorationDevel has no effect on the direction of CCL Industries i.e., CCL Industries and Peyto ExplorationDevel go up and down completely randomly.
Pair Corralation between CCL Industries and Peyto ExplorationDevel
Assuming the 90 days trading horizon CCL Industries is expected to generate 2.09 times less return on investment than Peyto ExplorationDevel. But when comparing it to its historical volatility, CCL Industries is 1.12 times less risky than Peyto ExplorationDevel. It trades about 0.06 of its potential returns per unit of risk. Peyto ExplorationDevelopment Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 978.00 in Peyto ExplorationDevelopment Corp on September 12, 2024 and sell it today you would earn a total of 653.00 from holding Peyto ExplorationDevelopment Corp or generate 66.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Peyto ExplorationDevelopment C
Performance |
| Timeline |
| CCL Industries |
| Peyto ExplorationDevel |
CCL Industries and Peyto ExplorationDevel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Peyto ExplorationDevel
The main advantage of trading using opposite CCL Industries and Peyto ExplorationDevel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Peyto ExplorationDevel 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 Peyto ExplorationDevel will offset losses from the drop in Peyto ExplorationDevel's long position.| CCL Industries vs. CCL Industries | CCL Industries vs. Quebecor | CCL Industries vs. Winpak | CCL Industries vs. Restaurant Brands International |
| Peyto ExplorationDevel vs. Birchcliff Energy | Peyto ExplorationDevel vs. Tourmaline Oil Corp | Peyto ExplorationDevel vs. ARC Resources | Peyto ExplorationDevel vs. Whitecap Resources |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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