Correlation Between Corus Entertainment and Dorel Industries
Can any of the company-specific risk be diversified away by investing in both Corus Entertainment and Dorel Industries 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 Corus Entertainment and Dorel Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corus Entertainment and Dorel Industries, you can compare the effects of market volatilities on Corus Entertainment and Dorel Industries 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 Corus Entertainment with a short position of Dorel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corus Entertainment and Dorel Industries.
Diversification Opportunities for Corus Entertainment and Dorel Industries
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corus and Dorel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Corus Entertainment and Dorel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorel Industries and Corus Entertainment 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 Corus Entertainment are associated (or correlated) with Dorel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorel Industries has no effect on the direction of Corus Entertainment i.e., Corus Entertainment and Dorel Industries go up and down completely randomly.
Pair Corralation between Corus Entertainment and Dorel Industries
Assuming the 90 days trading horizon Corus Entertainment is expected to under-perform the Dorel Industries. But the stock apears to be less risky and, when comparing its historical volatility, Corus Entertainment is 1.16 times less risky than Dorel Industries. The stock trades about -0.07 of its potential returns per unit of risk. The Dorel Industries is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Dorel Industries on November 3, 2024 and sell it today you would earn a total of 114.00 from holding Dorel Industries or generate 28.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corus Entertainment vs. Dorel Industries
Performance |
| Timeline |
| Corus Entertainment |
| Dorel Industries |
Corus Entertainment and Dorel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corus Entertainment and Dorel Industries
The main advantage of trading using opposite Corus Entertainment and Dorel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corus Entertainment position performs unexpectedly, Dorel Industries 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 Dorel Industries will offset losses from the drop in Dorel Industries' long position.| Corus Entertainment vs. AltaGas | Corus Entertainment vs. Transcontinental | Corus Entertainment vs. NorthWest Healthcare Properties | Corus Entertainment vs. Aecon Group |
| Dorel Industries vs. Transcontinental | Dorel Industries vs. Gildan Activewear | Dorel Industries vs. Cogeco Communications | Dorel Industries vs. High Liner Foods |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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