Correlation Between Canadian General and PJX Resources
Can any of the company-specific risk be diversified away by investing in both Canadian General and PJX Resources 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 PJX Resources 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 PJX Resources, you can compare the effects of market volatilities on Canadian General and PJX Resources 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 PJX Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and PJX Resources.
Diversification Opportunities for Canadian General and PJX Resources
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canadian and PJX is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and PJX Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PJX Resources 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 PJX Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PJX Resources has no effect on the direction of Canadian General i.e., Canadian General and PJX Resources go up and down completely randomly.
Pair Corralation between Canadian General and PJX Resources
Assuming the 90 days trading horizon Canadian General is expected to generate 2.25 times less return on investment than PJX Resources. But when comparing it to its historical volatility, Canadian General Investments is 6.25 times less risky than PJX Resources. It trades about 0.07 of its potential returns per unit of risk. PJX Resources is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in PJX Resources on August 25, 2024 and sell it today you would lose (1.50) from holding PJX Resources or give up 13.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. PJX Resources
Performance |
| Timeline |
| Canadian General Inv |
| PJX Resources |
Canadian General and PJX Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and PJX Resources
The main advantage of trading using opposite Canadian General and PJX Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, PJX Resources 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 PJX Resources will offset losses from the drop in PJX Resources' long position.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| PJX Resources vs. Canaf Investments | PJX Resources vs. Canadian General Investments | PJX Resources vs. Brookfield Investments | PJX Resources vs. Goodfood Market Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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