Correlation Between Canadian Pacific and Sunrun
Can any of the company-specific risk be diversified away by investing in both Canadian Pacific and Sunrun 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 Pacific and Sunrun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Pacific Railway and Sunrun Inc, you can compare the effects of market volatilities on Canadian Pacific and Sunrun 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 Pacific with a short position of Sunrun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Pacific and Sunrun.
Diversification Opportunities for Canadian Pacific and Sunrun
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Sunrun is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Pacific Railway and Sunrun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrun Inc and Canadian Pacific 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 Pacific Railway are associated (or correlated) with Sunrun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrun Inc has no effect on the direction of Canadian Pacific i.e., Canadian Pacific and Sunrun go up and down completely randomly.
Pair Corralation between Canadian Pacific and Sunrun
Allowing for the 90-day total investment horizon Canadian Pacific Railway is expected to generate 0.26 times more return on investment than Sunrun. However, Canadian Pacific Railway is 3.89 times less risky than Sunrun. It trades about 0.01 of its potential returns per unit of risk. Sunrun Inc is currently generating about -0.01 per unit of risk. If you would invest 7,487 in Canadian Pacific Railway on November 19, 2024 and sell it today you would earn a total of 265.00 from holding Canadian Pacific Railway or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Pacific Railway vs. Sunrun Inc
Performance |
| Timeline |
| Canadian Pacific Railway |
| Sunrun Inc |
Canadian Pacific and Sunrun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Pacific and Sunrun
The main advantage of trading using opposite Canadian Pacific and Sunrun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Pacific position performs unexpectedly, Sunrun 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 Sunrun will offset losses from the drop in Sunrun's long position.| Canadian Pacific vs. Union Pacific | Canadian Pacific vs. CSX Corporation | Canadian Pacific vs. Norfolk Southern | Canadian Pacific vs. Westinghouse Air Brake |
| Sunrun vs. Maxeon Solar Technologies | Sunrun vs. Canadian Solar | Sunrun vs. First Solar | Sunrun vs. Sunnova Energy International |
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 Stocks Directory module to find actively traded stocks across global markets.
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