Correlation Between Canadian Utilities and Forstrong Global
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Forstrong Global 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 Utilities and Forstrong Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Ltd and Forstrong Global Income, you can compare the effects of market volatilities on Canadian Utilities and Forstrong Global 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 Utilities with a short position of Forstrong Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Forstrong Global.
Diversification Opportunities for Canadian Utilities and Forstrong Global
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Forstrong is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Ltd and Forstrong Global Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forstrong Global Income and Canadian Utilities 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 Utilities Ltd are associated (or correlated) with Forstrong Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forstrong Global Income has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Forstrong Global go up and down completely randomly.
Pair Corralation between Canadian Utilities and Forstrong Global
Assuming the 90 days trading horizon Canadian Utilities Ltd is expected to generate 2.54 times more return on investment than Forstrong Global. However, Canadian Utilities is 2.54 times more volatile than Forstrong Global Income. It trades about 0.06 of its potential returns per unit of risk. Forstrong Global Income is currently generating about 0.13 per unit of risk. If you would invest 2,068 in Canadian Utilities Ltd on September 1, 2024 and sell it today you would earn a total of 147.00 from holding Canadian Utilities Ltd or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Canadian Utilities Ltd vs. Forstrong Global Income
Performance |
| Timeline |
| Canadian Utilities |
| Forstrong Global Income |
Canadian Utilities and Forstrong Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Forstrong Global
The main advantage of trading using opposite Canadian Utilities and Forstrong Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Forstrong Global 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 Forstrong Global will offset losses from the drop in Forstrong Global's long position.| Canadian Utilities vs. Altair Resources | Canadian Utilities vs. Arizona Metals Corp | Canadian Utilities vs. DRI Healthcare Trust | Canadian Utilities vs. Talon Metals Corp |
| Forstrong Global vs. iShares SPTSX 60 | Forstrong Global vs. iShares Core SP | Forstrong Global vs. iShares Core SPTSX | Forstrong Global vs. BMO Aggregate Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |