Correlation Between Corsa Coal and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Corsa Coal and Canaf Investments 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 Corsa Coal and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corsa Coal Corp and Canaf Investments, you can compare the effects of market volatilities on Corsa Coal and Canaf Investments 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 Corsa Coal with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corsa Coal and Canaf Investments.
Diversification Opportunities for Corsa Coal and Canaf Investments
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Corsa and Canaf is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Corsa Coal Corp and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Corsa Coal 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 Corsa Coal Corp are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Corsa Coal i.e., Corsa Coal and Canaf Investments go up and down completely randomly.
Pair Corralation between Corsa Coal and Canaf Investments
Assuming the 90 days horizon Corsa Coal Corp is expected to generate 3.75 times more return on investment than Canaf Investments. However, Corsa Coal is 3.75 times more volatile than Canaf Investments. It trades about 0.0 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.29 per unit of risk. If you would invest 19.00 in Corsa Coal Corp on August 30, 2024 and sell it today you would lose (1.00) from holding Corsa Coal Corp or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Corsa Coal Corp vs. Canaf Investments
Performance |
| Timeline |
| Corsa Coal Corp |
| Canaf Investments |
Corsa Coal and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corsa Coal and Canaf Investments
The main advantage of trading using opposite Corsa Coal and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corsa Coal position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Corsa Coal vs. Alpha Metallurgical Resources | Corsa Coal vs. Arch Resources | Corsa Coal vs. Warrior Met Coal | Corsa Coal vs. Ramaco Resources |
| Canaf Investments vs. Warrior Met Coal | Canaf Investments vs. Alpha Metallurgical Resources | Canaf Investments vs. SunCoke Energy | Canaf Investments vs. Ramaco Resources |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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