Correlation Between Canadian Utilities and Commerce Energy
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Commerce Energy 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 Canadian Utilities and Commerce Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Commerce Energy Group, you can compare the effects of market volatilities on Canadian Utilities and Commerce Energy 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 Canadian Utilities with a short position of Commerce Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Commerce Energy.
Diversification Opportunities for Canadian Utilities and Commerce Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canadian and Commerce is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Commerce Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Energy Group and Canadian Utilities 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 Canadian Utilities Limited are associated (or correlated) with Commerce Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Energy Group has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Commerce Energy go up and down completely randomly.
Pair Corralation between Canadian Utilities and Commerce Energy
If you would invest 0.01 in Commerce Energy Group on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Commerce Energy Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Commerce Energy Group
Performance |
| Timeline |
| Canadian Utilities |
| Commerce Energy Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Canadian Utilities and Commerce Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Commerce Energy
The main advantage of trading using opposite Canadian Utilities and Commerce Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Commerce Energy 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 Commerce Energy will offset losses from the drop in Commerce Energy's long position.| Canadian Utilities vs. TransAlta Corp | Canadian Utilities vs. Pampa Energia SA | Canadian Utilities vs. Vistra Energy Corp | Canadian Utilities vs. NRG Energy |
| Commerce Energy vs. AuraSource | Commerce Energy vs. Energy of Minas | Commerce Energy vs. Canadian Utilities Limited | Commerce Energy vs. Atco |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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