Correlation Between E L and Canaccord Genuity
Can any of the company-specific risk be diversified away by investing in both E L and Canaccord Genuity 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 E L and Canaccord Genuity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial Corp and Canaccord Genuity Group, you can compare the effects of market volatilities on E L and Canaccord Genuity 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 E L with a short position of Canaccord Genuity. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and Canaccord Genuity.
Diversification Opportunities for E L and Canaccord Genuity
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELF and Canaccord is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity and E L 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 E L Financial Corp are associated (or correlated) with Canaccord Genuity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaccord Genuity has no effect on the direction of E L i.e., E L and Canaccord Genuity go up and down completely randomly.
Pair Corralation between E L and Canaccord Genuity
Assuming the 90 days trading horizon E L Financial Corp is expected to generate 0.63 times more return on investment than Canaccord Genuity. However, E L Financial Corp is 1.6 times less risky than Canaccord Genuity. It trades about 0.12 of its potential returns per unit of risk. Canaccord Genuity Group is currently generating about 0.06 per unit of risk. If you would invest 86,032 in E L Financial Corp on September 12, 2024 and sell it today you would earn a total of 53,368 from holding E L Financial Corp or generate 62.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. Canaccord Genuity Group
Performance |
| Timeline |
| E L Financial |
| Canaccord Genuity |
E L and Canaccord Genuity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and Canaccord Genuity
The main advantage of trading using opposite E L and Canaccord Genuity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L position performs unexpectedly, Canaccord Genuity 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 Canaccord Genuity will offset losses from the drop in Canaccord Genuity's long position.| E L vs. Algoma Central | E L vs. Winpak | E L vs. Fairfax Financial Holdings | E L vs. Economic Investment Trust |
| Canaccord Genuity vs. CI Financial Corp | Canaccord Genuity vs. ECN Capital Corp | Canaccord Genuity vs. Element Fleet Management | Canaccord Genuity vs. Martinrea International |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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