Correlation Between Cineplex and Global Crossing
Can any of the company-specific risk be diversified away by investing in both Cineplex and Global Crossing 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 Cineplex and Global Crossing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cineplex and Global Crossing Airlines, you can compare the effects of market volatilities on Cineplex and Global Crossing 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 Cineplex with a short position of Global Crossing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cineplex and Global Crossing.
Diversification Opportunities for Cineplex and Global Crossing
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cineplex and Global is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cineplex and Global Crossing Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Crossing Airlines and Cineplex 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 Cineplex are associated (or correlated) with Global Crossing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Crossing Airlines has no effect on the direction of Cineplex i.e., Cineplex and Global Crossing go up and down completely randomly.
Pair Corralation between Cineplex and Global Crossing
Assuming the 90 days trading horizon Cineplex is expected to generate 0.35 times more return on investment than Global Crossing. However, Cineplex is 2.83 times less risky than Global Crossing. It trades about -0.03 of its potential returns per unit of risk. Global Crossing Airlines is currently generating about -0.19 per unit of risk. If you would invest 1,037 in Cineplex on August 27, 2024 and sell it today you would lose (16.00) from holding Cineplex or give up 1.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cineplex vs. Global Crossing Airlines
Performance |
| Timeline |
| Cineplex |
| Global Crossing Airlines |
Cineplex and Global Crossing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cineplex and Global Crossing
The main advantage of trading using opposite Cineplex and Global Crossing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cineplex position performs unexpectedly, Global Crossing 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 Global Crossing will offset losses from the drop in Global Crossing's long position.| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
| Global Crossing vs. Suncor Energy | Global Crossing vs. Cineplex | Global Crossing vs. Enbridge | Global Crossing vs. BlackBerry |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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