Correlation Between Canadian General and Labrador Gold
Can any of the company-specific risk be diversified away by investing in both Canadian General and Labrador Gold 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 Labrador Gold 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 Labrador Gold Corp, you can compare the effects of market volatilities on Canadian General and Labrador Gold 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 Labrador Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Labrador Gold.
Diversification Opportunities for Canadian General and Labrador Gold
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Labrador is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Labrador Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Gold 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 Labrador Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Gold Corp has no effect on the direction of Canadian General i.e., Canadian General and Labrador Gold go up and down completely randomly.
Pair Corralation between Canadian General and Labrador Gold
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.23 times more return on investment than Labrador Gold. However, Canadian General Investments is 4.3 times less risky than Labrador Gold. It trades about 0.11 of its potential returns per unit of risk. Labrador Gold Corp is currently generating about -0.31 per unit of risk. If you would invest 4,025 in Canadian General Investments on August 29, 2024 and sell it today you would earn a total of 90.00 from holding Canadian General Investments or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canadian General Investments vs. Labrador Gold Corp
Performance |
| Timeline |
| Canadian General Inv |
| Labrador Gold Corp |
Canadian General and Labrador Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Labrador Gold
The main advantage of trading using opposite Canadian General and Labrador Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Labrador Gold 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 Labrador Gold will offset losses from the drop in Labrador Gold'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 |
| Labrador Gold vs. Data Communications Management | Labrador Gold vs. Constellation Software | Labrador Gold vs. Faction Investment Group | Labrador Gold vs. Information Services |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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