Correlation Between Canadian Utilities and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Vastned Retail 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 Vastned Retail 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 Vastned Retail NV, you can compare the effects of market volatilities on Canadian Utilities and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Vastned Retail.
Diversification Opportunities for Canadian Utilities and Vastned Retail
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canadian and Vastned is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Vastned Retail go up and down completely randomly.
Pair Corralation between Canadian Utilities and Vastned Retail
Assuming the 90 days horizon Canadian Utilities is expected to generate 3.75 times less return on investment than Vastned Retail. But when comparing it to its historical volatility, Canadian Utilities Limited is 1.15 times less risky than Vastned Retail. It trades about 0.02 of its potential returns per unit of risk. Vastned Retail NV is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,744 in Vastned Retail NV on September 4, 2024 and sell it today you would earn a total of 696.00 from holding Vastned Retail NV or generate 39.91% 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. Vastned Retail NV
Performance |
| Timeline |
| Canadian Utilities |
| Vastned Retail NV |
Canadian Utilities and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and Vastned Retail
The main advantage of trading using opposite Canadian Utilities and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Canadian Utilities vs. SBA Communications Corp | Canadian Utilities vs. UET United Electronic | Canadian Utilities vs. Charter Communications | Canadian Utilities vs. METHODE ELECTRONICS |
| Vastned Retail vs. Simon Property Group | Vastned Retail vs. Link Real Estate | Vastned Retail vs. Kimco Realty | Vastned Retail vs. Range Resources Corp |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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