Correlation Between Cantex Mine and Canada Carbon
Can any of the company-specific risk be diversified away by investing in both Cantex Mine and Canada Carbon 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 Cantex Mine and Canada Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cantex Mine Development and Canada Carbon, you can compare the effects of market volatilities on Cantex Mine and Canada Carbon 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 Cantex Mine with a short position of Canada Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cantex Mine and Canada Carbon.
Diversification Opportunities for Cantex Mine and Canada Carbon
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cantex and Canada is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Cantex Mine Development and Canada Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Carbon and Cantex Mine 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 Cantex Mine Development are associated (or correlated) with Canada Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Carbon has no effect on the direction of Cantex Mine i.e., Cantex Mine and Canada Carbon go up and down completely randomly.
Pair Corralation between Cantex Mine and Canada Carbon
Assuming the 90 days horizon Cantex Mine Development is expected to under-perform the Canada Carbon. But the otc stock apears to be less risky and, when comparing its historical volatility, Cantex Mine Development is 7.75 times less risky than Canada Carbon. The otc stock trades about -0.01 of its potential returns per unit of risk. The Canada Carbon is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Canada Carbon on August 31, 2024 and sell it today you would lose (1.43) from holding Canada Carbon or give up 71.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Cantex Mine Development vs. Canada Carbon
Performance |
| Timeline |
| Cantex Mine Development |
| Canada Carbon |
Cantex Mine and Canada Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cantex Mine and Canada Carbon
The main advantage of trading using opposite Cantex Mine and Canada Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cantex Mine position performs unexpectedly, Canada Carbon 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 Canada Carbon will offset losses from the drop in Canada Carbon's long position.| Cantex Mine vs. Champion Bear Resources | Cantex Mine vs. Aurelia Metals Limited | Cantex Mine vs. Baroyeca Gold Silver | Cantex Mine vs. Centaurus Metals Limited |
| Canada Carbon vs. Tower Resources | Canada Carbon vs. South Star Battery | Canada Carbon vs. Kutcho Copper Corp | Canada Carbon vs. Vulcan Minerals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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