Correlation Between CCL Industries and Atrium Mortgage
Can any of the company-specific risk be diversified away by investing in both CCL Industries and Atrium Mortgage 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 Atrium Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CCL Industries and Atrium Mortgage Investment, you can compare the effects of market volatilities on CCL Industries and Atrium Mortgage 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 Atrium Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CCL Industries and Atrium Mortgage.
Diversification Opportunities for CCL Industries and Atrium Mortgage
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CCL and Atrium is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CCL Industries and Atrium Mortgage Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atrium Mortgage Inve 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 Atrium Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atrium Mortgage Inve has no effect on the direction of CCL Industries i.e., CCL Industries and Atrium Mortgage go up and down completely randomly.
Pair Corralation between CCL Industries and Atrium Mortgage
Assuming the 90 days trading horizon CCL Industries is expected to generate 1.38 times more return on investment than Atrium Mortgage. However, CCL Industries is 1.38 times more volatile than Atrium Mortgage Investment. It trades about 0.04 of its potential returns per unit of risk. Atrium Mortgage Investment is currently generating about 0.04 per unit of risk. If you would invest 6,105 in CCL Industries on August 27, 2024 and sell it today you would earn a total of 1,663 from holding CCL Industries or generate 27.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CCL Industries vs. Atrium Mortgage Investment
Performance |
| Timeline |
| CCL Industries |
| Atrium Mortgage Inve |
CCL Industries and Atrium Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CCL Industries and Atrium Mortgage
The main advantage of trading using opposite CCL Industries and Atrium Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCL Industries position performs unexpectedly, Atrium Mortgage 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 Atrium Mortgage will offset losses from the drop in Atrium Mortgage's long position.| CCL Industries vs. Stella Jones | CCL Industries vs. Gildan Activewear | CCL Industries vs. Toromont Industries | CCL Industries vs. Waste Connections |
| Atrium Mortgage vs. Senvest Capital | Atrium Mortgage vs. Fairfax Financial Holdings | Atrium Mortgage vs. Bank of Montreal | Atrium Mortgage vs. Bank of Montreal |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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