Correlation Between Canadian General and Montero Mining
Can any of the company-specific risk be diversified away by investing in both Canadian General and Montero Mining 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 Montero Mining 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 Montero Mining and, you can compare the effects of market volatilities on Canadian General and Montero Mining 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 Montero Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Montero Mining.
Diversification Opportunities for Canadian General and Montero Mining
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Montero is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Montero Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montero Mining 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 Montero Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montero Mining has no effect on the direction of Canadian General i.e., Canadian General and Montero Mining go up and down completely randomly.
Pair Corralation between Canadian General and Montero Mining
Assuming the 90 days trading horizon Canadian General is expected to generate 21.75 times less return on investment than Montero Mining. But when comparing it to its historical volatility, Canadian General Investments is 12.23 times less risky than Montero Mining. It trades about 0.05 of its potential returns per unit of risk. Montero Mining and is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Montero Mining and on September 4, 2024 and sell it today you would earn a total of 30.00 from holding Montero Mining and or generate 1500.0% 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. Montero Mining and
Performance |
| Timeline |
| Canadian General Inv |
| Montero Mining |
Canadian General and Montero Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Montero Mining
The main advantage of trading using opposite Canadian General and Montero Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Montero Mining 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 Montero Mining will offset losses from the drop in Montero Mining'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 |
| Montero Mining vs. East Side Games | Montero Mining vs. Data Communications Management | Montero Mining vs. TGS Esports | Montero Mining vs. Bragg Gaming 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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