Correlation Between Medical Facilities and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Medical Facilities and Canlan Ice 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 Medical Facilities and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medical Facilities and Canlan Ice Sports, you can compare the effects of market volatilities on Medical Facilities and Canlan Ice 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 Medical Facilities with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medical Facilities and Canlan Ice.
Diversification Opportunities for Medical Facilities and Canlan Ice
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Medical and Canlan is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Medical Facilities and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Medical Facilities 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 Medical Facilities are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Medical Facilities i.e., Medical Facilities and Canlan Ice go up and down completely randomly.
Pair Corralation between Medical Facilities and Canlan Ice
Assuming the 90 days horizon Medical Facilities is expected to generate 0.75 times more return on investment than Canlan Ice. However, Medical Facilities is 1.33 times less risky than Canlan Ice. It trades about 0.13 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.02 per unit of risk. If you would invest 779.00 in Medical Facilities on August 31, 2024 and sell it today you would earn a total of 791.00 from holding Medical Facilities or generate 101.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medical Facilities vs. Canlan Ice Sports
Performance |
| Timeline |
| Medical Facilities |
| Canlan Ice Sports |
Medical Facilities and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medical Facilities and Canlan Ice
The main advantage of trading using opposite Medical Facilities and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medical Facilities position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Medical Facilities vs. iShares Canadian HYBrid | Medical Facilities vs. Brompton European Dividend | Medical Facilities vs. Solar Alliance Energy | Medical Facilities vs. PHN Multi Style All Cap |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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