Correlation Between Canadian Utilities and Maritime Launch
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Maritime Launch 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 Maritime Launch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Maritime Launch Services, you can compare the effects of market volatilities on Canadian Utilities and Maritime Launch 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 Maritime Launch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Maritime Launch.
Diversification Opportunities for Canadian Utilities and Maritime Launch
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Maritime is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Maritime Launch Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maritime Launch Services 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 Limited are associated (or correlated) with Maritime Launch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maritime Launch Services has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Maritime Launch go up and down completely randomly.
Pair Corralation between Canadian Utilities and Maritime Launch
Assuming the 90 days horizon Canadian Utilities Limited is expected to generate 0.18 times more return on investment than Maritime Launch. However, Canadian Utilities Limited is 5.63 times less risky than Maritime Launch. It trades about -0.2 of its potential returns per unit of risk. Maritime Launch Services is currently generating about -0.11 per unit of risk. If you would invest 3,475 in Canadian Utilities Limited on October 25, 2024 and sell it today you would lose (88.00) from holding Canadian Utilities Limited or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Maritime Launch Services
Performance |
| Timeline |
| Canadian Utilities |
| Maritime Launch Services |
Canadian Utilities and Maritime Launch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Maritime Launch
The main advantage of trading using opposite Canadian Utilities and Maritime Launch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Maritime Launch 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 Maritime Launch will offset losses from the drop in Maritime Launch's long position.| Canadian Utilities vs. Fortis Inc | Canadian Utilities vs. Emera Inc | Canadian Utilities vs. Algonquin Power Utilities | Canadian Utilities vs. ATCO |
| Maritime Launch vs. Canadian Utilities Limited | Maritime Launch vs. Upstart Investments | Maritime Launch vs. DIRTT Environmental Solutions | Maritime Launch vs. BluMetric Environmental |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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