Correlation Between Canadian General and T2 Metals
Can any of the company-specific risk be diversified away by investing in both Canadian General and T2 Metals 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 T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on Canadian General and T2 Metals 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and T2 Metals.
Diversification Opportunities for Canadian General and T2 Metals
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Canadian and TWO is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals Corp 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Canadian General i.e., Canadian General and T2 Metals go up and down completely randomly.
Pair Corralation between Canadian General and T2 Metals
Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.57 times more return on investment than T2 Metals. However, Canadian General Investments is 1.75 times less risky than T2 Metals. It trades about -0.16 of its potential returns per unit of risk. T2 Metals Corp is currently generating about -0.29 per unit of risk. If you would invest 4,167 in Canadian General Investments on November 5, 2024 and sell it today you would lose (192.00) from holding Canadian General Investments or give up 4.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. T2 Metals Corp
Performance |
| Timeline |
| Canadian General Inv |
| T2 Metals Corp |
Canadian General and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and T2 Metals
The main advantage of trading using opposite Canadian General and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, T2 Metals 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 T2 Metals will offset losses from the drop in T2 Metals' long position.| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
| T2 Metals vs. Evertz Technologies Limited | T2 Metals vs. Gfl Environmental Holdings | T2 Metals vs. Firan Technology Group | T2 Metals vs. Labrador Iron Ore |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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