Correlation Between CCL Industries and Tamarack Valley
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Tamarack Valley 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 Tamarack Valley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Tamarack Valley Energy, you can compare the effects of market volatilities on CCL Industries and Tamarack Valley 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 Tamarack Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Tamarack Valley.
Diversification Opportunities for CCL Industries and Tamarack Valley
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CCL and Tamarack is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Tamarack Valley Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamarack Valley 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 Tamarack Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamarack Valley Energy has no effect on the direction of CCL Industries i.e., CCL Industries and Tamarack Valley go up and down completely randomly.
Pair Corralation between CCL Industries and Tamarack Valley
Assuming the 90 days trading horizon CCL Industries is expected to generate 0.62 times more return on investment than Tamarack Valley. However, CCL Industries is 1.62 times less risky than Tamarack Valley. It trades about 0.05 of its potential returns per unit of risk. Tamarack Valley Energy is currently generating about 0.02 per unit of risk. If you would invest 5,566 in CCL Industries on September 14, 2024 and sell it today you would earn a total of 1,934 from holding CCL Industries or generate 34.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Tamarack Valley Energy
Performance |
| Timeline |
| CCL Industries |
| Tamarack Valley Energy |
CCL Industries and Tamarack Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Tamarack Valley
The main advantage of trading using opposite CCL Industries and Tamarack Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Tamarack Valley 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 Tamarack Valley will offset losses from the drop in Tamarack Valley's long position.| CCL Industries vs. Cogeco Communications | CCL Industries vs. Quebecor | CCL Industries vs. CCL Industries | CCL Industries vs. Finning International |
| Tamarack Valley vs. MEG Energy Corp | Tamarack Valley vs. Cardinal Energy | Tamarack Valley vs. Athabasca Oil Corp | Tamarack Valley 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 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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