Correlation Between Clairvest and Morguard
Can any of the company-specific risk be diversified away by investing in both Clairvest and Morguard 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 Clairvest and Morguard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clairvest Group and Morguard, you can compare the effects of market volatilities on Clairvest and Morguard 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 Clairvest with a short position of Morguard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clairvest and Morguard.
Diversification Opportunities for Clairvest and Morguard
Good diversification
The 3 months correlation between Clairvest and Morguard is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Clairvest Group and Morguard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morguard and Clairvest 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 Clairvest Group are associated (or correlated) with Morguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morguard has no effect on the direction of Clairvest i.e., Clairvest and Morguard go up and down completely randomly.
Pair Corralation between Clairvest and Morguard
Assuming the 90 days trading horizon Clairvest Group is expected to generate 1.21 times more return on investment than Morguard. However, Clairvest is 1.21 times more volatile than Morguard. It trades about 0.01 of its potential returns per unit of risk. Morguard is currently generating about -0.02 per unit of risk. If you would invest 6,948 in Clairvest Group on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Clairvest Group or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clairvest Group vs. Morguard
Performance |
| Timeline |
| Clairvest Group |
| Morguard |
Clairvest and Morguard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clairvest and Morguard
The main advantage of trading using opposite Clairvest and Morguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clairvest position performs unexpectedly, Morguard 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 Morguard will offset losses from the drop in Morguard's long position.| Clairvest vs. Clarke Inc | Clairvest vs. Guardian Capital Group | Clairvest vs. Accord Financial Corp | Clairvest vs. E L Financial Corp |
| Morguard vs. InterRent Real Estate | Morguard vs. Canadian Apartment Properties | Morguard vs. Granite Real Estate | Morguard vs. Crombie Real Estate |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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