Correlation Between Canadian General and Fonix Mobile
Can any of the company-specific risk be diversified away by investing in both Canadian General and Fonix Mobile 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 Fonix Mobile 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 Fonix Mobile plc, you can compare the effects of market volatilities on Canadian General and Fonix Mobile 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 Fonix Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Fonix Mobile.
Diversification Opportunities for Canadian General and Fonix Mobile
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Fonix is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Fonix Mobile plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fonix Mobile plc 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 Fonix Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fonix Mobile plc has no effect on the direction of Canadian General i.e., Canadian General and Fonix Mobile go up and down completely randomly.
Pair Corralation between Canadian General and Fonix Mobile
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.66 times more return on investment than Fonix Mobile. However, Canadian General Investments is 1.52 times less risky than Fonix Mobile. It trades about -0.22 of its potential returns per unit of risk. Fonix Mobile plc is currently generating about -0.18 per unit of risk. If you would invest 235,000 in Canadian General Investments on October 13, 2024 and sell it today you would lose (9,000) from holding Canadian General Investments or give up 3.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Canadian General Investments vs. Fonix Mobile plc
Performance |
| Timeline |
| Canadian General Inv |
| Fonix Mobile plc |
Canadian General and Fonix Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Fonix Mobile
The main advantage of trading using opposite Canadian General and Fonix Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Fonix Mobile 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 Fonix Mobile will offset losses from the drop in Fonix Mobile's long position.| Canadian General vs. Fonix Mobile plc | Canadian General vs. Fevertree Drinks Plc | Canadian General vs. Summit Materials Cl | Canadian General vs. Martin Marietta Materials |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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