Correlation Between Cineplex and Power Fi
Can any of the company-specific risk be diversified away by investing in both Cineplex and Power Fi 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 Power Fi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cineplex and Power Fi 440, you can compare the effects of market volatilities on Cineplex and Power Fi 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 Power Fi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cineplex and Power Fi.
Diversification Opportunities for Cineplex and Power Fi
Poor diversification
The 3 months correlation between Cineplex and Power is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cineplex and Power Fi 440 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Fi 440 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 Power Fi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Fi 440 has no effect on the direction of Cineplex i.e., Cineplex and Power Fi go up and down completely randomly.
Pair Corralation between Cineplex and Power Fi
Assuming the 90 days trading horizon Cineplex is expected to generate 2.46 times more return on investment than Power Fi. However, Cineplex is 2.46 times more volatile than Power Fi 440. It trades about 0.62 of its potential returns per unit of risk. Power Fi 440 is currently generating about 0.32 per unit of risk. If you would invest 1,007 in Cineplex on September 13, 2024 and sell it today you would earn a total of 288.00 from holding Cineplex or generate 28.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cineplex vs. Power Fi 440
Performance |
| Timeline |
| Cineplex |
| Power Fi 440 |
Cineplex and Power Fi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cineplex and Power Fi
The main advantage of trading using opposite Cineplex and Power Fi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cineplex position performs unexpectedly, Power Fi 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 Power Fi will offset losses from the drop in Power Fi's long position.| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
| Power Fi vs. TGS Esports | Power Fi vs. Computer Modelling Group | Power Fi vs. Overactive Media Corp | Power Fi vs. Postmedia Network Canada |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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