Correlation Between Canadian Utilities and Martina Minerals
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Martina Minerals 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 Martina Minerals 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 Martina Minerals Corp, you can compare the effects of market volatilities on Canadian Utilities and Martina Minerals 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 Martina Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Martina Minerals.
Diversification Opportunities for Canadian Utilities and Martina Minerals
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canadian and Martina is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Martina Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martina Minerals 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 Martina Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martina Minerals Corp has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Martina Minerals go up and down completely randomly.
Pair Corralation between Canadian Utilities and Martina Minerals
Assuming the 90 days horizon Canadian Utilities Limited is expected to under-perform the Martina Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Utilities Limited is 67.44 times less risky than Martina Minerals. The stock trades about -0.35 of its potential returns per unit of risk. The Martina Minerals Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Martina Minerals Corp on October 12, 2024 and sell it today you would earn a total of 5.00 from holding Martina Minerals Corp or generate 200.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. Martina Minerals Corp
Performance |
| Timeline |
| Canadian Utilities |
| Martina Minerals Corp |
Canadian Utilities and Martina Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Martina Minerals
The main advantage of trading using opposite Canadian Utilities and Martina Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Martina Minerals 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 Martina Minerals will offset losses from the drop in Martina Minerals' long position.| Canadian Utilities vs. Fortis Inc | Canadian Utilities vs. Emera Inc | Canadian Utilities vs. Algonquin Power Utilities | Canadian Utilities vs. ATCO |
| Martina Minerals vs. Caribbean Utilities | Martina Minerals vs. Eddy Smart Home | Martina Minerals vs. BluMetric Environmental | Martina Minerals vs. Canadian Utilities Limited |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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