Correlation Between Fossil and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Fossil and Canlan Ice 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 Fossil and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Canlan Ice Sports, you can compare the effects of market volatilities on Fossil and Canlan Ice 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 Fossil with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Canlan Ice.
Diversification Opportunities for Fossil and Canlan Ice
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fossil and Canlan is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Fossil 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 Fossil Group are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Fossil i.e., Fossil and Canlan Ice go up and down completely randomly.
Pair Corralation between Fossil and Canlan Ice
Given the investment horizon of 90 days Fossil Group is expected to generate 47.15 times more return on investment than Canlan Ice. However, Fossil is 47.15 times more volatile than Canlan Ice Sports. It trades about 0.03 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.14 per unit of risk. If you would invest 116.00 in Fossil Group on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Fossil Group or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Fossil Group vs. Canlan Ice Sports
Performance |
| Timeline |
| Fossil Group |
| Canlan Ice Sports |
Fossil and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Canlan Ice
The main advantage of trading using opposite Fossil and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Canlan Ice vs. Mind Technology | Canlan Ice vs. KVH Industries | Canlan Ice vs. Nextnav Acquisition Corp | Canlan Ice vs. Marfrig Global Foods |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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