Correlation Between Canadian Natural and Autocanada
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Autocanada 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 Canadian Natural and Autocanada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Natural Resources and Autocanada, you can compare the effects of market volatilities on Canadian Natural and Autocanada 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 Canadian Natural with a short position of Autocanada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Autocanada.
Diversification Opportunities for Canadian Natural and Autocanada
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Autocanada is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Autocanada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autocanada and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Autocanada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autocanada has no effect on the direction of Canadian Natural i.e., Canadian Natural and Autocanada go up and down completely randomly.
Pair Corralation between Canadian Natural and Autocanada
Assuming the 90 days trading horizon Canadian Natural Resources is expected to under-perform the Autocanada. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Natural Resources is 1.38 times less risky than Autocanada. The stock trades about -0.17 of its potential returns per unit of risk. The Autocanada is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,760 in Autocanada on November 8, 2024 and sell it today you would earn a total of 60.00 from holding Autocanada or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Autocanada
Performance |
| Timeline |
| Canadian Natural Res |
| Autocanada |
Canadian Natural and Autocanada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Autocanada
The main advantage of trading using opposite Canadian Natural and Autocanada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Autocanada 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 Autocanada will offset losses from the drop in Autocanada's long position.| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
| Autocanada vs. Martinrea International | Autocanada vs. Linamar | Autocanada vs. NFI Group | Autocanada vs. Element Fleet Management |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |