Correlation Between Canadian Utilities and Millbank Mining
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Millbank Mining 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 Millbank Mining 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 Millbank Mining Corp, you can compare the effects of market volatilities on Canadian Utilities and Millbank Mining 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 Millbank Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Millbank Mining.
Diversification Opportunities for Canadian Utilities and Millbank Mining
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canadian and Millbank is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Millbank Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millbank Mining Corp 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 Millbank Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millbank Mining Corp has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Millbank Mining go up and down completely randomly.
Pair Corralation between Canadian Utilities and Millbank Mining
Assuming the 90 days horizon Canadian Utilities is expected to generate 88.89 times less return on investment than Millbank Mining. But when comparing it to its historical volatility, Canadian Utilities Limited is 8.37 times less risky than Millbank Mining. It trades about 0.01 of its potential returns per unit of risk. Millbank Mining Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Millbank Mining Corp on October 14, 2024 and sell it today you would earn a total of 34.00 from holding Millbank Mining Corp or generate 261.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Millbank Mining Corp
Performance |
| Timeline |
| Canadian Utilities |
| Millbank Mining Corp |
Canadian Utilities and Millbank Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Millbank Mining
The main advantage of trading using opposite Canadian Utilities and Millbank Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Millbank Mining 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 Millbank Mining will offset losses from the drop in Millbank Mining's long position.| Canadian Utilities vs. Fortis Inc | Canadian Utilities vs. Emera Inc | Canadian Utilities vs. Algonquin Power Utilities | Canadian Utilities vs. ATCO |
| Millbank Mining vs. Reliq Health Technologies | Millbank Mining vs. Nova Leap Health | Millbank Mining vs. Mako Mining Corp | Millbank Mining vs. NeuPath Health |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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