Correlation Between Extendicare and Chemtrade Logistics
Can any of the company-specific risk be diversified away by investing in both Extendicare and Chemtrade Logistics 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 Extendicare and Chemtrade Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extendicare and Chemtrade Logistics Income, you can compare the effects of market volatilities on Extendicare and Chemtrade Logistics 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 Extendicare with a short position of Chemtrade Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extendicare and Chemtrade Logistics.
Diversification Opportunities for Extendicare and Chemtrade Logistics
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Extendicare and Chemtrade is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Extendicare and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics and Extendicare 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 Extendicare are associated (or correlated) with Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Extendicare i.e., Extendicare and Chemtrade Logistics go up and down completely randomly.
Pair Corralation between Extendicare and Chemtrade Logistics
Assuming the 90 days trading horizon Extendicare is expected to generate 1.41 times more return on investment than Chemtrade Logistics. However, Extendicare is 1.41 times more volatile than Chemtrade Logistics Income. It trades about 0.26 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about 0.14 per unit of risk. If you would invest 930.00 in Extendicare on August 29, 2024 and sell it today you would earn a total of 103.00 from holding Extendicare or generate 11.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extendicare vs. Chemtrade Logistics Income
Performance |
| Timeline |
| Extendicare |
| Chemtrade Logistics |
Extendicare and Chemtrade Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extendicare and Chemtrade Logistics
The main advantage of trading using opposite Extendicare and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extendicare position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.| Extendicare vs. Sienna Senior Living | Extendicare vs. Chartwell Retirement Residences | Extendicare vs. Chemtrade Logistics Income | Extendicare vs. NorthWest Healthcare Properties |
| Chemtrade Logistics vs. Extendicare | Chemtrade Logistics vs. NorthWest Healthcare Properties | Chemtrade Logistics vs. Exchange Income | Chemtrade Logistics vs. Freehold Royalties |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |