Correlation Between Canadian Utilities and Logista
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Logista 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 Logista 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 Logista, you can compare the effects of market volatilities on Canadian Utilities and Logista 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 Logista. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Logista.
Diversification Opportunities for Canadian Utilities and Logista
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Logista is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Logista in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logista 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 Logista. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logista has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Logista go up and down completely randomly.
Pair Corralation between Canadian Utilities and Logista
Assuming the 90 days horizon Canadian Utilities Limited is expected to generate 1.25 times more return on investment than Logista. However, Canadian Utilities is 1.25 times more volatile than Logista. It trades about 0.14 of its potential returns per unit of risk. Logista is currently generating about 0.12 per unit of risk. If you would invest 1,986 in Canadian Utilities Limited on September 1, 2024 and sell it today you would earn a total of 413.00 from holding Canadian Utilities Limited or generate 20.8% 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. Logista
Performance |
| Timeline |
| Canadian Utilities |
| Logista |
Canadian Utilities and Logista Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Logista
The main advantage of trading using opposite Canadian Utilities and Logista positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Logista 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 Logista will offset losses from the drop in Logista's long position.| Canadian Utilities vs. ATRESMEDIA | Canadian Utilities vs. Lamar Advertising | Canadian Utilities vs. CARSALESCOM | Canadian Utilities vs. PLAYTIKA HOLDING DL 01 |
| Logista vs. Addus HomeCare | Logista vs. HomeToGo SE | Logista vs. PennantPark Investment | Logista vs. Haier Smart Home |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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