Correlation Between Canadian General and Shawcor
Can any of the company-specific risk be diversified away by investing in both Canadian General and Shawcor 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 Shawcor 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 Shawcor, you can compare the effects of market volatilities on Canadian General and Shawcor 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 Shawcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Shawcor.
Diversification Opportunities for Canadian General and Shawcor
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Shawcor is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Shawcor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shawcor 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 Shawcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shawcor has no effect on the direction of Canadian General i.e., Canadian General and Shawcor go up and down completely randomly.
Pair Corralation between Canadian General and Shawcor
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.24 times more return on investment than Shawcor. However, Canadian General Investments is 4.24 times less risky than Shawcor. It trades about 0.2 of its potential returns per unit of risk. Shawcor is currently generating about -0.13 per unit of risk. If you would invest 4,049 in Canadian General Investments on September 15, 2024 and sell it today you would earn a total of 86.00 from holding Canadian General Investments or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canadian General Investments vs. Shawcor
Performance |
| Timeline |
| Canadian General Inv |
| Shawcor |
Canadian General and Shawcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Shawcor
The main advantage of trading using opposite Canadian General and Shawcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Shawcor 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 Shawcor will offset losses from the drop in Shawcor'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 |
| Shawcor vs. Hemisphere Energy | Shawcor vs. Canadian General Investments | Shawcor vs. Guru Organic Energy | Shawcor vs. Faction Investment Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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