Correlation Between Chemtrade Logistics and Extendicare
Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics and Extendicare 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 Chemtrade Logistics and Extendicare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chemtrade Logistics Income and Extendicare, you can compare the effects of market volatilities on Chemtrade Logistics and Extendicare 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 Chemtrade Logistics with a short position of Extendicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and Extendicare.
Diversification Opportunities for Chemtrade Logistics and Extendicare
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chemtrade and Extendicare is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and Extendicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extendicare and Chemtrade Logistics 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 Chemtrade Logistics Income are associated (or correlated) with Extendicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extendicare has no effect on the direction of Chemtrade Logistics i.e., Chemtrade Logistics and Extendicare go up and down completely randomly.
Pair Corralation between Chemtrade Logistics and Extendicare
Assuming the 90 days trading horizon Chemtrade Logistics is expected to generate 1.56 times less return on investment than Extendicare. But when comparing it to its historical volatility, Chemtrade Logistics Income is 1.32 times less risky than Extendicare. It trades about 0.12 of its potential returns per unit of risk. Extendicare is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 674.00 in Extendicare on August 29, 2024 and sell it today you would earn a total of 359.00 from holding Extendicare or generate 53.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chemtrade Logistics Income vs. Extendicare
Performance |
| Timeline |
| Chemtrade Logistics |
| Extendicare |
Chemtrade Logistics and Extendicare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chemtrade Logistics and Extendicare
The main advantage of trading using opposite Chemtrade Logistics and Extendicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemtrade Logistics position performs unexpectedly, Extendicare 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 Extendicare will offset losses from the drop in Extendicare's long position.| Chemtrade Logistics vs. Extendicare | Chemtrade Logistics vs. NorthWest Healthcare Properties | Chemtrade Logistics vs. Exchange Income | Chemtrade Logistics vs. Freehold Royalties |
| Extendicare vs. Solar Alliance Energy | Extendicare vs. Braille Energy Systems | Extendicare vs. MedMira | Extendicare vs. Lite Access Technologies |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |