Correlation Between Canadian General and Terravest Capital
Can any of the company-specific risk be diversified away by investing in both Canadian General and Terravest Capital 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 Terravest Capital 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 Terravest Capital, you can compare the effects of market volatilities on Canadian General and Terravest Capital 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 Terravest Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Terravest Capital.
Diversification Opportunities for Canadian General and Terravest Capital
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Terravest is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Terravest Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terravest Capital 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 Terravest Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terravest Capital has no effect on the direction of Canadian General i.e., Canadian General and Terravest Capital go up and down completely randomly.
Pair Corralation between Canadian General and Terravest Capital
Assuming the 90 days trading horizon Canadian General is expected to generate 3.82 times less return on investment than Terravest Capital. But when comparing it to its historical volatility, Canadian General Investments is 2.01 times less risky than Terravest Capital. It trades about 0.09 of its potential returns per unit of risk. Terravest Capital is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,975 in Terravest Capital on September 15, 2024 and sell it today you would earn a total of 4,580 from holding Terravest Capital or generate 65.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Terravest Capital
Performance |
| Timeline |
| Canadian General Inv |
| Terravest Capital |
Canadian General and Terravest Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Terravest Capital
The main advantage of trading using opposite Canadian General and Terravest Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Terravest Capital 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 Terravest Capital will offset losses from the drop in Terravest Capital'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 |
| Terravest Capital vs. Leveljump Healthcare Corp | Terravest Capital vs. TUT Fitness Group | Terravest Capital vs. Andlauer Healthcare Gr | Terravest Capital vs. Maple Peak Investments |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |