Correlation Between Canadian General and Stroud Resources
Can any of the company-specific risk be diversified away by investing in both Canadian General and Stroud 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 Stroud 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 Stroud Resources, you can compare the effects of market volatilities on Canadian General and Stroud 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 Stroud Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Stroud Resources.
Diversification Opportunities for Canadian General and Stroud Resources
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Stroud is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Stroud Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stroud 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 Stroud Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stroud Resources has no effect on the direction of Canadian General i.e., Canadian General and Stroud Resources go up and down completely randomly.
Pair Corralation between Canadian General and Stroud Resources
Assuming the 90 days trading horizon Canadian General Investments is expected to under-perform the Stroud Resources. But the stock apears to be less risky and, when comparing its historical volatility, Canadian General Investments is 13.44 times less risky than Stroud Resources. The stock trades about -0.06 of its potential returns per unit of risk. The Stroud Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Stroud Resources on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Stroud Resources or generate 0.0% 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. Stroud Resources
Performance |
| Timeline |
| Canadian General Inv |
| Stroud Resources |
Canadian General and Stroud Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Stroud Resources
The main advantage of trading using opposite Canadian General and Stroud Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Stroud 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 Stroud Resources will offset losses from the drop in Stroud 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 |
| Stroud Resources vs. Faction Investment Group | Stroud Resources vs. Highwood Asset Management | Stroud Resources vs. Canadian General Investments | Stroud Resources vs. American Hotel Income |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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