Correlation Between Canadian General and Goeasy
Can any of the company-specific risk be diversified away by investing in both Canadian General and Goeasy 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 Goeasy 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 goeasy, you can compare the effects of market volatilities on Canadian General and Goeasy 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 Goeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Goeasy.
Diversification Opportunities for Canadian General and Goeasy
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Goeasy is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy 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 Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Canadian General i.e., Canadian General and Goeasy go up and down completely randomly.
Pair Corralation between Canadian General and Goeasy
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.71 times more return on investment than Goeasy. However, Canadian General Investments is 1.4 times less risky than Goeasy. It trades about 0.09 of its potential returns per unit of risk. goeasy is currently generating about -0.13 per unit of risk. If you would invest 4,023 in Canadian General Investments on August 31, 2024 and sell it today you would earn a total of 74.00 from holding Canadian General Investments or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. goeasy
Performance |
| Timeline |
| Canadian General Inv |
| goeasy |
Canadian General and Goeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Goeasy
The main advantage of trading using opposite Canadian General and Goeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Goeasy 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 Goeasy will offset losses from the drop in Goeasy's long position.| Canadian General vs. iShares Canadian HYBrid | Canadian General vs. Brompton European Dividend | Canadian General vs. Solar Alliance Energy | Canadian General vs. PHN Multi Style All Cap |
| Goeasy vs. Maple Peak Investments | Goeasy vs. Atrium Mortgage Investment | Goeasy vs. Faction Investment Group | Goeasy vs. Canadian General 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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