Correlation Between Canadian General and BCE
Can any of the company-specific risk be diversified away by investing in both Canadian General and BCE 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 BCE 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 BCE Inc Pref, you can compare the effects of market volatilities on Canadian General and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and BCE.
Diversification Opportunities for Canadian General and BCE
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and BCE is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and BCE Inc Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc Pref 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc Pref has no effect on the direction of Canadian General i.e., Canadian General and BCE go up and down completely randomly.
Pair Corralation between Canadian General and BCE
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 1.72 times more return on investment than BCE. However, Canadian General is 1.72 times more volatile than BCE Inc Pref. It trades about 0.06 of its potential returns per unit of risk. BCE Inc Pref is currently generating about 0.02 per unit of risk. If you would invest 3,107 in Canadian General Investments on September 13, 2024 and sell it today you would earn a total of 1,023 from holding Canadian General Investments or generate 32.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. BCE Inc Pref
Performance |
| Timeline |
| Canadian General Inv |
| BCE Inc Pref |
Canadian General and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and BCE
The main advantage of trading using opposite Canadian General and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| Canadian General vs. Berkshire Hathaway CDR | Canadian General vs. E L Financial Corp | Canadian General vs. E L Financial 3 | Canadian General vs. Molson Coors Canada |
| BCE vs. BluMetric Environmental | BCE vs. DIRTT Environmental Solutions | BCE vs. Royal Bank of | BCE vs. Everyday People Financial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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