Correlation Between Caribbean Utilities and Canadian General
Can any of the company-specific risk be diversified away by investing in both Caribbean Utilities and Canadian General 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 Caribbean Utilities and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caribbean Utilities and Canadian General Investments, you can compare the effects of market volatilities on Caribbean Utilities and Canadian General 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 Caribbean Utilities with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caribbean Utilities and Canadian General.
Diversification Opportunities for Caribbean Utilities and Canadian General
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Caribbean and Canadian is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Caribbean Utilities and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Caribbean 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 Caribbean Utilities are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Caribbean Utilities i.e., Caribbean Utilities and Canadian General go up and down completely randomly.
Pair Corralation between Caribbean Utilities and Canadian General
Assuming the 90 days trading horizon Caribbean Utilities is expected to under-perform the Canadian General. But the stock apears to be less risky and, when comparing its historical volatility, Caribbean Utilities is 1.11 times less risky than Canadian General. The stock trades about -0.01 of its potential returns per unit of risk. The Canadian General Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,667 in Canadian General Investments on August 30, 2024 and sell it today you would earn a total of 430.00 from holding Canadian General Investments or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caribbean Utilities vs. Canadian General Investments
Performance |
| Timeline |
| Caribbean Utilities |
| Canadian General Inv |
Caribbean Utilities and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caribbean Utilities and Canadian General
The main advantage of trading using opposite Caribbean Utilities and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caribbean Utilities position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Caribbean Utilities vs. Maxim Power Corp | Caribbean Utilities vs. iShares Canadian HYBrid | Caribbean Utilities vs. Altagas Cum Red | Caribbean Utilities vs. European Residential Real |
| Canadian General vs. Uniteds Limited | Canadian General vs. Economic Investment Trust | Canadian General vs. abrdn Asia Pacific | Canadian General vs. Clairvest Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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