Correlation Between ECN Capital and Pender Growth
Can any of the company-specific risk be diversified away by investing in both ECN Capital and Pender Growth 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 ECN Capital and Pender Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECN Capital Corp and Pender Growth, you can compare the effects of market volatilities on ECN Capital and Pender Growth 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 ECN Capital with a short position of Pender Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECN Capital and Pender Growth.
Diversification Opportunities for ECN Capital and Pender Growth
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECN and Pender is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and Pender Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pender Growth and ECN Capital 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 ECN Capital Corp are associated (or correlated) with Pender Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pender Growth has no effect on the direction of ECN Capital i.e., ECN Capital and Pender Growth go up and down completely randomly.
Pair Corralation between ECN Capital and Pender Growth
Assuming the 90 days trading horizon ECN Capital Corp is expected to generate 3.83 times more return on investment than Pender Growth. However, ECN Capital is 3.83 times more volatile than Pender Growth. It trades about 0.16 of its potential returns per unit of risk. Pender Growth is currently generating about 0.04 per unit of risk. If you would invest 213.00 in ECN Capital Corp on August 28, 2024 and sell it today you would earn a total of 68.00 from holding ECN Capital Corp or generate 31.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECN Capital Corp vs. Pender Growth
Performance |
| Timeline |
| ECN Capital Corp |
| Pender Growth |
ECN Capital and Pender Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECN Capital and Pender Growth
The main advantage of trading using opposite ECN Capital and Pender Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECN Capital position performs unexpectedly, Pender Growth 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 Pender Growth will offset losses from the drop in Pender Growth's long position.| ECN Capital vs. Element Fleet Management | ECN Capital vs. Colliers International Group | ECN Capital vs. Altus Group Limited | ECN Capital vs. FirstService Corp |
| Pender Growth vs. NVIDIA CDR | Pender Growth vs. Apple Inc CDR | Pender Growth vs. Microsoft Corp CDR | Pender Growth vs. Amazon CDR |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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