Correlation Between Canadian General and Made Tech
Can any of the company-specific risk be diversified away by investing in both Canadian General and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on Canadian General and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Made Tech.
Diversification Opportunities for Canadian General and Made Tech
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Made is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of Canadian General i.e., Canadian General and Made Tech go up and down completely randomly.
Pair Corralation between Canadian General and Made Tech
Assuming the 90 days trading horizon Canadian General is expected to generate 2.44 times less return on investment than Made Tech. But when comparing it to its historical volatility, Canadian General Investments is 1.56 times less risky than Made Tech. It trades about 0.08 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,450 in Made Tech Group on October 25, 2024 and sell it today you would earn a total of 100.00 from holding Made Tech Group or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Canadian General Investments vs. Made Tech Group
Performance |
| Timeline |
| Canadian General Inv |
| Made Tech Group |
Canadian General and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Made Tech
The main advantage of trading using opposite Canadian General and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| Canadian General vs. Games Workshop Group | Canadian General vs. Auto Trader Group | Canadian General vs. Coor Service Management | Canadian General vs. iShares Dow Jones |
| Made Tech vs. Axway Software SA | Made Tech vs. Ecclesiastical Insurance Office | Made Tech vs. Sabre Insurance Group | Made Tech vs. Jupiter Fund Management |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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