Correlation Between Exchange Income and Cineplex
Can any of the company-specific risk be diversified away by investing in both Exchange Income and Cineplex 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 Exchange Income and Cineplex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Cineplex, you can compare the effects of market volatilities on Exchange Income and Cineplex 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 Exchange Income with a short position of Cineplex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Cineplex.
Diversification Opportunities for Exchange Income and Cineplex
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exchange and Cineplex is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and Cineplex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cineplex and Exchange Income 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 Exchange Income are associated (or correlated) with Cineplex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cineplex has no effect on the direction of Exchange Income i.e., Exchange Income and Cineplex go up and down completely randomly.
Pair Corralation between Exchange Income and Cineplex
Assuming the 90 days trading horizon Exchange Income is expected to generate 0.31 times more return on investment than Cineplex. However, Exchange Income is 3.21 times less risky than Cineplex. It trades about 0.31 of its potential returns per unit of risk. Cineplex is currently generating about 0.03 per unit of risk. If you would invest 5,442 in Exchange Income on August 29, 2024 and sell it today you would earn a total of 245.00 from holding Exchange Income or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Cineplex
Performance |
| Timeline |
| Exchange Income |
| Cineplex |
Exchange Income and Cineplex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Cineplex
The main advantage of trading using opposite Exchange Income and Cineplex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income position performs unexpectedly, Cineplex 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 Cineplex will offset losses from the drop in Cineplex's long position.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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