Correlation Between Canadian Natural and Clairvest
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Clairvest 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 Clairvest 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 Clairvest Group, you can compare the effects of market volatilities on Canadian Natural and Clairvest 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 Clairvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Clairvest.
Diversification Opportunities for Canadian Natural and Clairvest
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Clairvest is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Clairvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clairvest Group 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 Clairvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clairvest Group has no effect on the direction of Canadian Natural i.e., Canadian Natural and Clairvest go up and down completely randomly.
Pair Corralation between Canadian Natural and Clairvest
Assuming the 90 days trading horizon Canadian Natural Resources is expected to under-perform the Clairvest. In addition to that, Canadian Natural is 1.94 times more volatile than Clairvest Group. It trades about -0.1 of its total potential returns per unit of risk. Clairvest Group is currently generating about 0.12 per unit of volatility. If you would invest 6,975 in Clairvest Group on August 28, 2024 and sell it today you would earn a total of 125.00 from holding Clairvest Group or generate 1.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Clairvest Group
Performance |
| Timeline |
| Canadian Natural Res |
| Clairvest Group |
Canadian Natural and Clairvest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Clairvest
The main advantage of trading using opposite Canadian Natural and Clairvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Clairvest 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 Clairvest will offset losses from the drop in Clairvest's long position.| Canadian Natural vs. Yangarra Resources | Canadian Natural vs. iShares Canadian HYBrid | Canadian Natural vs. Altagas Cum Red | Canadian Natural vs. European Residential Real |
| Clairvest vs. Clarke Inc | Clairvest vs. Guardian Capital Group | Clairvest vs. Accord Financial Corp | Clairvest vs. E L Financial Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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