Correlation Between Canadian General and Chrysalis Investments
Can any of the company-specific risk be diversified away by investing in both Canadian General and Chrysalis Investments 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 General and Chrysalis Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian General Investments and Chrysalis Investments, you can compare the effects of market volatilities on Canadian General and Chrysalis Investments 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 General with a short position of Chrysalis Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Chrysalis Investments.
Diversification Opportunities for Canadian General and Chrysalis Investments
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Chrysalis is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Chrysalis Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chrysalis Investments and Canadian General 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 General Investments are associated (or correlated) with Chrysalis Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chrysalis Investments has no effect on the direction of Canadian General i.e., Canadian General and Chrysalis Investments go up and down completely randomly.
Pair Corralation between Canadian General and Chrysalis Investments
Assuming the 90 days trading horizon Canadian General Investments is expected to under-perform the Chrysalis Investments. But the stock apears to be less risky and, when comparing its historical volatility, Canadian General Investments is 1.56 times less risky than Chrysalis Investments. The stock trades about -0.21 of its potential returns per unit of risk. The Chrysalis Investments is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 9,820 in Chrysalis Investments on October 11, 2024 and sell it today you would earn a total of 620.00 from holding Chrysalis Investments or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Chrysalis Investments
Performance |
| Timeline |
| Canadian General Inv |
| Chrysalis Investments |
Canadian General and Chrysalis Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Chrysalis Investments
The main advantage of trading using opposite Canadian General and Chrysalis Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Chrysalis Investments 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 Chrysalis Investments will offset losses from the drop in Chrysalis Investments' long position.| Canadian General vs. One Media iP | Canadian General vs. LBG Media PLC | Canadian General vs. Cornish Metals | Canadian General vs. Jacquet Metal Service |
| Chrysalis Investments vs. Orient Telecoms | Chrysalis Investments vs. First Class Metals | Chrysalis Investments vs. URU Metals | Chrysalis Investments vs. Charter Communications Cl |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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