Correlation Between Canadian Natural and Nanalysis Scientific
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Nanalysis Scientific 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 Nanalysis Scientific 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 Nanalysis Scientific Corp, you can compare the effects of market volatilities on Canadian Natural and Nanalysis Scientific 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 Nanalysis Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Nanalysis Scientific.
Diversification Opportunities for Canadian Natural and Nanalysis Scientific
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canadian and Nanalysis is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Nanalysis Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanalysis Scientific Corp 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 Nanalysis Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanalysis Scientific Corp has no effect on the direction of Canadian Natural i.e., Canadian Natural and Nanalysis Scientific go up and down completely randomly.
Pair Corralation between Canadian Natural and Nanalysis Scientific
Assuming the 90 days trading horizon Canadian Natural Resources is expected to generate 0.37 times more return on investment than Nanalysis Scientific. However, Canadian Natural Resources is 2.68 times less risky than Nanalysis Scientific. It trades about -0.01 of its potential returns per unit of risk. Nanalysis Scientific Corp is currently generating about -0.04 per unit of risk. If you would invest 4,518 in Canadian Natural Resources on November 2, 2024 and sell it today you would lose (38.00) from holding Canadian Natural Resources or give up 0.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Nanalysis Scientific Corp
Performance |
| Timeline |
| Canadian Natural Res |
| Nanalysis Scientific Corp |
Canadian Natural and Nanalysis Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Nanalysis Scientific
The main advantage of trading using opposite Canadian Natural and Nanalysis Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Nanalysis Scientific 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 Nanalysis Scientific will offset losses from the drop in Nanalysis Scientific's long position.| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
| Nanalysis Scientific vs. Diversified Royalty Corp | Nanalysis Scientific vs. Highwood Asset Management | Nanalysis Scientific vs. Osisko Metals | Nanalysis Scientific vs. Partners Value Investments |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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