Correlation Between Canadian General and Advanced Micro
Can any of the company-specific risk be diversified away by investing in both Canadian General and Advanced Micro 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 Advanced Micro 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 Advanced Micro Devices, you can compare the effects of market volatilities on Canadian General and Advanced Micro 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 Advanced Micro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Advanced Micro.
Diversification Opportunities for Canadian General and Advanced Micro
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and Advanced is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Advanced Micro Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Micro Devices 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 Advanced Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Micro Devices has no effect on the direction of Canadian General i.e., Canadian General and Advanced Micro go up and down completely randomly.
Pair Corralation between Canadian General and Advanced Micro
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.52 times more return on investment than Advanced Micro. However, Canadian General Investments is 1.94 times less risky than Advanced Micro. It trades about 0.16 of its potential returns per unit of risk. Advanced Micro Devices is currently generating about -0.08 per unit of risk. If you would invest 3,976 in Canadian General Investments on September 2, 2024 and sell it today you would earn a total of 121.00 from holding Canadian General Investments or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Advanced Micro Devices
Performance |
| Timeline |
| Canadian General Inv |
| Advanced Micro Devices |
Canadian General and Advanced Micro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Advanced Micro
The main advantage of trading using opposite Canadian General and Advanced Micro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Advanced Micro 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 Advanced Micro will offset losses from the drop in Advanced Micro'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 |
| Advanced Micro vs. Royal Bank of | Advanced Micro vs. Toronto Dominion Bank Pref | Advanced Micro vs. Toronto Dominion Bank | Advanced Micro vs. Amazon CDR |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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