Correlation Between Canlan Ice and FTAC Emerald
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and FTAC Emerald 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 Canlan Ice and FTAC Emerald into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and FTAC Emerald Acquisition, you can compare the effects of market volatilities on Canlan Ice and FTAC Emerald 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 Canlan Ice with a short position of FTAC Emerald. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and FTAC Emerald.
Diversification Opportunities for Canlan Ice and FTAC Emerald
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canlan and FTAC is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and FTAC Emerald Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FTAC Emerald Acquisition and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with FTAC Emerald. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FTAC Emerald Acquisition has no effect on the direction of Canlan Ice i.e., Canlan Ice and FTAC Emerald go up and down completely randomly.
Pair Corralation between Canlan Ice and FTAC Emerald
Assuming the 90 days horizon Canlan Ice is expected to generate 1.68 times less return on investment than FTAC Emerald. But when comparing it to its historical volatility, Canlan Ice Sports is 3.63 times less risky than FTAC Emerald. It trades about 0.14 of its potential returns per unit of risk. FTAC Emerald Acquisition is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,050 in FTAC Emerald Acquisition on September 1, 2024 and sell it today you would earn a total of 67.00 from holding FTAC Emerald Acquisition or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. FTAC Emerald Acquisition
Performance |
| Timeline |
| Canlan Ice Sports |
| FTAC Emerald Acquisition |
Canlan Ice and FTAC Emerald Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and FTAC Emerald
The main advantage of trading using opposite Canlan Ice and FTAC Emerald positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, FTAC Emerald 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 FTAC Emerald will offset losses from the drop in FTAC Emerald's long position.| Canlan Ice vs. Philip Morris International | Canlan Ice vs. Ambev SA ADR | Canlan Ice vs. Japan Tobacco ADR | Canlan Ice vs. Compania Cervecerias Unidas |
| FTAC Emerald vs. HF Sinclair Corp | FTAC Emerald vs. Qualys Inc | FTAC Emerald vs. NetSol Technologies | FTAC Emerald vs. Cebu Air ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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