Correlation Between Canadian General and NorthWest Healthcare
Can any of the company-specific risk be diversified away by investing in both Canadian General and NorthWest Healthcare 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 NorthWest Healthcare 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 NorthWest Healthcare Properties, you can compare the effects of market volatilities on Canadian General and NorthWest Healthcare 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 NorthWest Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and NorthWest Healthcare.
Diversification Opportunities for Canadian General and NorthWest Healthcare
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and NorthWest is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and NorthWest Healthcare Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorthWest Healthcare 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 NorthWest Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorthWest Healthcare has no effect on the direction of Canadian General i.e., Canadian General and NorthWest Healthcare go up and down completely randomly.
Pair Corralation between Canadian General and NorthWest Healthcare
Assuming the 90 days trading horizon Canadian General is expected to generate 1.07 times less return on investment than NorthWest Healthcare. But when comparing it to its historical volatility, Canadian General Investments is 1.68 times less risky than NorthWest Healthcare. It trades about 0.08 of its potential returns per unit of risk. NorthWest Healthcare Properties is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 406.00 in NorthWest Healthcare Properties on September 4, 2024 and sell it today you would earn a total of 89.00 from holding NorthWest Healthcare Properties or generate 21.92% 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. NorthWest Healthcare Propertie
Performance |
| Timeline |
| Canadian General Inv |
| NorthWest Healthcare |
Canadian General and NorthWest Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and NorthWest Healthcare
The main advantage of trading using opposite Canadian General and NorthWest Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, NorthWest Healthcare 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 NorthWest Healthcare will offset losses from the drop in NorthWest Healthcare'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 |
| NorthWest Healthcare vs. SmartCentres Real Estate | NorthWest Healthcare vs. Dream Industrial Real | NorthWest Healthcare vs. RioCan Real Estate | NorthWest Healthcare vs. Algonquin Power Utilities |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |