Correlation Between Canadian General and Xtract One
Can any of the company-specific risk be diversified away by investing in both Canadian General and Xtract One 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 Xtract One 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 Xtract One Technologies, you can compare the effects of market volatilities on Canadian General and Xtract One 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 Xtract One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Xtract One.
Diversification Opportunities for Canadian General and Xtract One
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Canadian and Xtract is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Xtract One Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtract One Technologies 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 Xtract One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtract One Technologies has no effect on the direction of Canadian General i.e., Canadian General and Xtract One go up and down completely randomly.
Pair Corralation between Canadian General and Xtract One
Assuming the 90 days trading horizon Canadian General is expected to generate 2.13 times less return on investment than Xtract One. But when comparing it to its historical volatility, Canadian General Investments is 3.67 times less risky than Xtract One. It trades about 0.05 of its potential returns per unit of risk. Xtract One Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 56.00 in Xtract One Technologies on August 27, 2024 and sell it today you would earn a total of 13.00 from holding Xtract One Technologies or generate 23.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian General Investments vs. Xtract One Technologies
Performance |
| Timeline |
| Canadian General Inv |
| Xtract One Technologies |
Canadian General and Xtract One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian General and Xtract One
The main advantage of trading using opposite Canadian General and Xtract One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Xtract One 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 Xtract One will offset losses from the drop in Xtract One's long position.| Canadian General vs. NVIDIA CDR | Canadian General vs. Apple Inc CDR | Canadian General vs. Microsoft Corp CDR | Canadian General vs. Amazon CDR |
| Xtract One vs. Slate Grocery REIT | Xtract One vs. Roots Corp | Xtract One vs. Aimia Inc | Xtract One vs. Tucows Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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