Correlation Between Dividend and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Dividend and Canaf Investments 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 Dividend and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dividend 15 Split and Canaf Investments, you can compare the effects of market volatilities on Dividend and Canaf Investments 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 Dividend with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dividend and Canaf Investments.
Diversification Opportunities for Dividend and Canaf Investments
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dividend and Canaf is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Dividend 15 Split and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Dividend 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 Dividend 15 Split are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Dividend i.e., Dividend and Canaf Investments go up and down completely randomly.
Pair Corralation between Dividend and Canaf Investments
Assuming the 90 days trading horizon Dividend is expected to generate 6.9 times less return on investment than Canaf Investments. But when comparing it to its historical volatility, Dividend 15 Split is 11.95 times less risky than Canaf Investments. It trades about 0.16 of its potential returns per unit of risk. Canaf Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Canaf Investments on October 11, 2024 and sell it today you would earn a total of 25.00 from holding Canaf Investments or generate 250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dividend 15 Split vs. Canaf Investments
Performance |
| Timeline |
| Dividend 15 Split |
| Canaf Investments |
Dividend and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dividend and Canaf Investments
The main advantage of trading using opposite Dividend and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dividend position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Dividend vs. Canaf Investments | Dividend vs. Atrium Mortgage Investment | Dividend vs. Partners Value Investments | Dividend vs. Storage Vault Canada |
| Canaf Investments vs. South Pacific Metals | Canaf Investments vs. Sun Peak Metals | Canaf Investments vs. XXIX Metal Corp | Canaf Investments vs. Osisko Metals |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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