Correlation Between Cargojet and Goeasy
Can any of the company-specific risk be diversified away by investing in both Cargojet and Goeasy 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 Cargojet and Goeasy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cargojet and goeasy, you can compare the effects of market volatilities on Cargojet and Goeasy 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 Cargojet with a short position of Goeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargojet and Goeasy.
Diversification Opportunities for Cargojet and Goeasy
Very weak diversification
The 3 months correlation between Cargojet and Goeasy is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cargojet and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy and Cargojet 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 Cargojet are associated (or correlated) with Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Cargojet i.e., Cargojet and Goeasy go up and down completely randomly.
Pair Corralation between Cargojet and Goeasy
Assuming the 90 days trading horizon Cargojet is expected to generate 0.88 times more return on investment than Goeasy. However, Cargojet is 1.14 times less risky than Goeasy. It trades about 0.05 of its potential returns per unit of risk. goeasy is currently generating about -0.01 per unit of risk. If you would invest 10,889 in Cargojet on September 1, 2024 and sell it today you would earn a total of 1,201 from holding Cargojet or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Cargojet vs. goeasy
Performance |
| Timeline |
| Cargojet |
| goeasy |
Cargojet and Goeasy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cargojet and Goeasy
The main advantage of trading using opposite Cargojet and Goeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargojet position performs unexpectedly, Goeasy 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 Goeasy will offset losses from the drop in Goeasy's long position.The idea behind Cargojet and goeasy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Goeasy vs. Lion One Metals | Goeasy vs. Metalero Mining Corp | Goeasy vs. Upstart Investments | Goeasy vs. Computer Modelling Group |
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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