Correlation Between Canadian Utilities and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and ATRESMEDIA 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 ATRESMEDIA 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 ATRESMEDIA, you can compare the effects of market volatilities on Canadian Utilities and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and ATRESMEDIA.
Diversification Opportunities for Canadian Utilities and ATRESMEDIA
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canadian and ATRESMEDIA is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and ATRESMEDIA go up and down completely randomly.
Pair Corralation between Canadian Utilities and ATRESMEDIA
Assuming the 90 days horizon Canadian Utilities Limited is expected to generate 1.84 times more return on investment than ATRESMEDIA. However, Canadian Utilities is 1.84 times more volatile than ATRESMEDIA. It trades about 0.22 of its potential returns per unit of risk. ATRESMEDIA is currently generating about 0.18 per unit of risk. If you would invest 2,257 in Canadian Utilities Limited on September 3, 2024 and sell it today you would earn a total of 142.00 from holding Canadian Utilities Limited or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Utilities Limited vs. ATRESMEDIA
Performance |
| Timeline |
| Canadian Utilities |
| ATRESMEDIA |
Canadian Utilities and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Utilities and ATRESMEDIA
The main advantage of trading using opposite Canadian Utilities and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| Canadian Utilities vs. MAVEN WIRELESS SWEDEN | Canadian Utilities vs. Citic Telecom International | Canadian Utilities vs. Tower One Wireless | Canadian Utilities vs. Chunghwa Telecom Co |
| ATRESMEDIA vs. Western Copper and | ATRESMEDIA vs. Lifeway Foods | ATRESMEDIA vs. United Natural Foods | ATRESMEDIA vs. CAL MAINE FOODS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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