Correlation Between Canlan Ice and Otsuka
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Otsuka 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 Otsuka 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 Otsuka, you can compare the effects of market volatilities on Canlan Ice and Otsuka 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 Otsuka. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Otsuka.
Diversification Opportunities for Canlan Ice and Otsuka
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canlan and Otsuka is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Otsuka in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Otsuka 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 Otsuka. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Otsuka has no effect on the direction of Canlan Ice i.e., Canlan Ice and Otsuka go up and down completely randomly.
Pair Corralation between Canlan Ice and Otsuka
Assuming the 90 days horizon Canlan Ice Sports is expected to generate 0.01 times more return on investment than Otsuka. However, Canlan Ice Sports is 104.1 times less risky than Otsuka. It trades about 0.13 of its potential returns per unit of risk. Otsuka is currently generating about -0.06 per unit of risk. If you would invest 277.00 in Canlan Ice Sports on September 14, 2024 and sell it today you would earn a total of 20.00 from holding Canlan Ice Sports or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.15% |
| Values | Daily Returns |
Canlan Ice Sports vs. Otsuka
Performance |
| Timeline |
| Canlan Ice Sports |
| Otsuka |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Canlan Ice and Otsuka Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Otsuka
The main advantage of trading using opposite Canlan Ice and Otsuka positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Otsuka 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 Otsuka will offset losses from the drop in Otsuka's long position.| Canlan Ice vs. Toro Co | Canlan Ice vs. Procter Gamble | Canlan Ice vs. Bank of New | Canlan Ice vs. Raytech Holding Limited |
| Otsuka vs. Canlan Ice Sports | Otsuka vs. JD Sports Fashion | Otsuka vs. Catalyst Pharmaceuticals | Otsuka vs. Xponential Fitness |
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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