Correlation Between Canfor and Quipt Home
Can any of the company-specific risk be diversified away by investing in both Canfor and Quipt Home 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 Canfor and Quipt Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canfor and Quipt Home Medical, you can compare the effects of market volatilities on Canfor and Quipt Home 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 Canfor with a short position of Quipt Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canfor and Quipt Home.
Diversification Opportunities for Canfor and Quipt Home
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canfor and Quipt is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canfor and Quipt Home Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quipt Home Medical and Canfor 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 Canfor are associated (or correlated) with Quipt Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quipt Home Medical has no effect on the direction of Canfor i.e., Canfor and Quipt Home go up and down completely randomly.
Pair Corralation between Canfor and Quipt Home
Assuming the 90 days trading horizon Canfor is expected to generate 0.88 times more return on investment than Quipt Home. However, Canfor is 1.14 times less risky than Quipt Home. It trades about 0.1 of its potential returns per unit of risk. Quipt Home Medical is currently generating about -0.18 per unit of risk. If you would invest 1,727 in Canfor on August 29, 2024 and sell it today you would earn a total of 78.00 from holding Canfor or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canfor vs. Quipt Home Medical
Performance |
| Timeline |
| Canfor |
| Quipt Home Medical |
Canfor and Quipt Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canfor and Quipt Home
The main advantage of trading using opposite Canfor and Quipt Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canfor position performs unexpectedly, Quipt Home 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 Quipt Home will offset losses from the drop in Quipt Home's long position.| Canfor vs. Quipt Home Medical | Canfor vs. Air Canada | Canfor vs. Northstar Clean Technologies | Canfor vs. WELL Health Technologies |
| Quipt Home vs. CVS HEALTH CDR | Quipt Home vs. NeuPath Health | Quipt Home vs. TGS Esports | Quipt Home vs. Cogeco Communications |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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