Correlation Between Canadian General and Alliance Mining
Can any of the company-specific risk be diversified away by investing in both Canadian General and Alliance Mining 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 Alliance Mining 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 Alliance Mining Corp, you can compare the effects of market volatilities on Canadian General and Alliance Mining 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 Alliance Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Alliance Mining.
Diversification Opportunities for Canadian General and Alliance Mining
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canadian and Alliance is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Alliance Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Mining Corp 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 Alliance Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Mining Corp has no effect on the direction of Canadian General i.e., Canadian General and Alliance Mining go up and down completely randomly.
Pair Corralation between Canadian General and Alliance Mining
Assuming the 90 days trading horizon Canadian General is expected to generate 2.79 times less return on investment than Alliance Mining. But when comparing it to its historical volatility, Canadian General Investments is 6.91 times less risky than Alliance Mining. It trades about 0.08 of its potential returns per unit of risk. Alliance Mining Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Alliance Mining Corp on September 14, 2024 and sell it today you would lose (1.00) from holding Alliance Mining Corp or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Alliance Mining Corp
Performance |
| Timeline |
| Canadian General Inv |
| Alliance Mining Corp |
Canadian General and Alliance Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Alliance Mining
The main advantage of trading using opposite Canadian General and Alliance Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Alliance Mining 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 Alliance Mining will offset losses from the drop in Alliance Mining's long position.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| Alliance Mining vs. VIP Entertainment Technologies | Alliance Mining vs. AGF Management Limited | Alliance Mining vs. Highwood Asset Management | Alliance Mining vs. CNJ Capital Investments |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |