Correlation Between Cadence Design and Canada Goose

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Can any of the company-specific risk be diversified away by investing in both Cadence Design and Canada Goose 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 Cadence Design and Canada Goose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadence Design Systems and Canada Goose Holdings, you can compare the effects of market volatilities on Cadence Design and Canada Goose 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 Cadence Design with a short position of Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadence Design and Canada Goose.

Diversification Opportunities for Cadence Design and Canada Goose

CadenceCanadaDiversified AwayCadenceCanadaDiversified Away100%
-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cadence and Canada is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Design Systems and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings and Cadence Design 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 Cadence Design Systems are associated (or correlated) with Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of Cadence Design i.e., Cadence Design and Canada Goose go up and down completely randomly.

Pair Corralation between Cadence Design and Canada Goose

Given the investment horizon of 90 days Cadence Design Systems is expected to under-perform the Canada Goose. But the stock apears to be less risky and, when comparing its historical volatility, Cadence Design Systems is 1.61 times less risky than Canada Goose. The stock trades about -0.32 of its potential returns per unit of risk. The Canada Goose Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,095  in Canada Goose Holdings on December 2, 2024 and sell it today you would lose (73.00) from holding Canada Goose Holdings or give up 6.67% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Cadence Design Systems  vs.  Canada Goose Holdings

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020
JavaScript chart by amCharts 3.21.15CDNS GOOS
       Timeline  
Cadence Design Systems 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Cadence Design Systems has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebFebMar250260270280290300310320
Canada Goose Holdings 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Canada Goose Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Canada Goose may actually be approaching a critical reversion point that can send shares even higher in April 2025.
JavaScript chart by amCharts 3.21.15JanFebFebMar9.51010.51111.512

Cadence Design and Canada Goose Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.12-3.09-2.05-1.020.00.911.842.773.69 0.0350.0400.0450.0500.0550.0600.065
JavaScript chart by amCharts 3.21.15CDNS GOOS
       Returns  

Pair Trading with Cadence Design and Canada Goose

The main advantage of trading using opposite Cadence Design and Canada Goose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Design position performs unexpectedly, Canada Goose 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 Canada Goose will offset losses from the drop in Canada Goose's long position.
The idea behind Cadence Design Systems and Canada Goose Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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