Correlation Between Canlan Ice and Solaris Energy
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Solaris Energy 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 Solaris Energy 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 Solaris Energy Infrastructure,, you can compare the effects of market volatilities on Canlan Ice and Solaris Energy 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 Solaris Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Solaris Energy.
Diversification Opportunities for Canlan Ice and Solaris Energy
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and Solaris is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Solaris Energy Infrastructure, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solaris Energy Infra 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 Solaris Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solaris Energy Infra has no effect on the direction of Canlan Ice i.e., Canlan Ice and Solaris Energy go up and down completely randomly.
Pair Corralation between Canlan Ice and Solaris Energy
Assuming the 90 days horizon Canlan Ice is expected to generate 20.92 times less return on investment than Solaris Energy. But when comparing it to its historical volatility, Canlan Ice Sports is 32.35 times less risky than Solaris Energy. It trades about 0.13 of its potential returns per unit of risk. Solaris Energy Infrastructure, is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 878.00 in Solaris Energy Infrastructure, on September 12, 2024 and sell it today you would earn a total of 2,027 from holding Solaris Energy Infrastructure, or generate 230.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Canlan Ice Sports vs. Solaris Energy Infrastructure,
Performance |
| Timeline |
| Canlan Ice Sports |
| Solaris Energy Infra |
Canlan Ice and Solaris Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Solaris Energy
The main advantage of trading using opposite Canlan Ice and Solaris Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Solaris Energy 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 Solaris Energy will offset losses from the drop in Solaris Energy's long position.| Canlan Ice vs. Oriental Land Co | Canlan Ice vs. Oriental Land Co | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products |
| Solaris Energy vs. Schlumberger NV | Solaris Energy vs. Weatherford International PLC | Solaris Energy vs. Tenaris SA ADR | Solaris Energy vs. Halliburton |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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