Correlation Between Canadian Natural and Daito Trust
Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Daito Trust 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 Daito Trust 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 Daito Trust Construction, you can compare the effects of market volatilities on Canadian Natural and Daito Trust 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 Daito Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Daito Trust.
Diversification Opportunities for Canadian Natural and Daito Trust
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Daito is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Daito Trust Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daito Trust Construction 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 Daito Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daito Trust Construction has no effect on the direction of Canadian Natural i.e., Canadian Natural and Daito Trust go up and down completely randomly.
Pair Corralation between Canadian Natural and Daito Trust
Assuming the 90 days horizon Canadian Natural Resources is expected to under-perform the Daito Trust. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Natural Resources is 1.1 times less risky than Daito Trust. The stock trades about -0.06 of its potential returns per unit of risk. The Daito Trust Construction is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 10,200 in Daito Trust Construction on September 14, 2024 and sell it today you would earn a total of 800.00 from holding Daito Trust Construction or generate 7.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Natural Resources vs. Daito Trust Construction
Performance |
| Timeline |
| Canadian Natural Res |
| Daito Trust Construction |
Canadian Natural and Daito Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Natural and Daito Trust
The main advantage of trading using opposite Canadian Natural and Daito Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Natural position performs unexpectedly, Daito Trust 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 Daito Trust will offset losses from the drop in Daito Trust's long position.| Canadian Natural vs. Daito Trust Construction | Canadian Natural vs. H FARM SPA | Canadian Natural vs. SALESFORCE INC CDR | Canadian Natural vs. Dairy Farm International |
| Daito Trust vs. Superior Plus Corp | Daito Trust vs. SIVERS SEMICONDUCTORS AB | Daito Trust vs. Reliance Steel Aluminum | Daito Trust vs. CHINA HUARONG ENERHD 50 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |