Correlation Between Canlan Ice and Marchex
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Marchex 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 Marchex 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 Marchex, you can compare the effects of market volatilities on Canlan Ice and Marchex 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 Marchex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Marchex.
Diversification Opportunities for Canlan Ice and Marchex
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canlan and Marchex is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Marchex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marchex 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 Marchex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marchex has no effect on the direction of Canlan Ice i.e., Canlan Ice and Marchex go up and down completely randomly.
Pair Corralation between Canlan Ice and Marchex
Assuming the 90 days horizon Canlan Ice is expected to generate 14.8 times less return on investment than Marchex. But when comparing it to its historical volatility, Canlan Ice Sports is 28.48 times less risky than Marchex. It trades about 0.15 of its potential returns per unit of risk. Marchex is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 138.00 in Marchex on September 1, 2024 and sell it today you would earn a total of 44.00 from holding Marchex or generate 31.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Marchex
Performance |
| Timeline |
| Canlan Ice Sports |
| Marchex |
Canlan Ice and Marchex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Marchex
The main advantage of trading using opposite Canlan Ice and Marchex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Marchex 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 Marchex will offset losses from the drop in Marchex'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 |
| Marchex vs. Entravision Communications | Marchex vs. Direct Digital Holdings | Marchex vs. Cimpress NV | Marchex vs. Townsquare Media |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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