Correlation Between Canadian Utilities and Gateway Real
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Gateway Real 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 Gateway Real 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 Gateway Real Estate, you can compare the effects of market volatilities on Canadian Utilities and Gateway Real 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 Gateway Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Gateway Real.
Diversification Opportunities for Canadian Utilities and Gateway Real
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and Gateway is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Gateway Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Real Estate 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 Gateway Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Real Estate has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Gateway Real go up and down completely randomly.
Pair Corralation between Canadian Utilities and Gateway Real
Assuming the 90 days horizon Canadian Utilities Limited is expected to under-perform the Gateway Real. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Utilities Limited is 62.54 times less risky than Gateway Real. The stock trades about -0.18 of its potential returns per unit of risk. The Gateway Real Estate is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Gateway Real Estate on October 29, 2024 and sell it today you would earn a total of 52.00 from holding Gateway Real Estate or generate 115.56% 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. Gateway Real Estate
Performance |
| Timeline |
| Canadian Utilities |
| Gateway Real Estate |
Canadian Utilities and Gateway Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Gateway Real
The main advantage of trading using opposite Canadian Utilities and Gateway Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Gateway Real 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 Gateway Real will offset losses from the drop in Gateway Real's long position.| Canadian Utilities vs. Nomad Foods | Canadian Utilities vs. COLUMBIA SPORTSWEAR | Canadian Utilities vs. Cleanaway Waste Management | Canadian Utilities vs. BII Railway Transportation |
| Gateway Real vs. Deutsche Wohnen SE | Gateway Real vs. Gateway Real Estate | Gateway Real vs. TIMES CHINA HLDGS | Gateway Real vs. LANDSEA HOMES P |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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