Correlation Between Canoe EIT and Solution Financial
Can any of the company-specific risk be diversified away by investing in both Canoe EIT and Solution Financial 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 Canoe EIT and Solution Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canoe EIT Income and Solution Financial, you can compare the effects of market volatilities on Canoe EIT and Solution Financial 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 Canoe EIT with a short position of Solution Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoe EIT and Solution Financial.
Diversification Opportunities for Canoe EIT and Solution Financial
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canoe and Solution is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and Solution Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solution Financial and Canoe EIT 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 Canoe EIT Income are associated (or correlated) with Solution Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solution Financial has no effect on the direction of Canoe EIT i.e., Canoe EIT and Solution Financial go up and down completely randomly.
Pair Corralation between Canoe EIT and Solution Financial
Assuming the 90 days trading horizon Canoe EIT Income is expected to generate 0.19 times more return on investment than Solution Financial. However, Canoe EIT Income is 5.28 times less risky than Solution Financial. It trades about 0.11 of its potential returns per unit of risk. Solution Financial is currently generating about 0.0 per unit of risk. If you would invest 1,137 in Canoe EIT Income on October 31, 2024 and sell it today you would earn a total of 403.00 from holding Canoe EIT Income or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canoe EIT Income vs. Solution Financial
Performance |
| Timeline |
| Canoe EIT Income |
| Solution Financial |
Canoe EIT and Solution Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canoe EIT and Solution Financial
The main advantage of trading using opposite Canoe EIT and Solution Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canoe EIT position performs unexpectedly, Solution Financial 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 Solution Financial will offset losses from the drop in Solution Financial's long position.| Canoe EIT vs. Dividend 15 Split | Canoe EIT vs. E Split Corp | Canoe EIT vs. Global Dividend Growth | Canoe EIT vs. Dividend Growth Split |
| Solution Financial vs. KDA Group | Solution Financial vs. iShares Canadian HYBrid | Solution Financial vs. Altagas Cum Red | Solution Financial vs. European Residential Real |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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