Correlation Between Globe Trade and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Globe Trade and Canadian Utilities 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 Globe Trade and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and Canadian Utilities Limited, you can compare the effects of market volatilities on Globe Trade and Canadian Utilities 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 Globe Trade with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Canadian Utilities.
Diversification Opportunities for Globe Trade and Canadian Utilities
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Globe and Canadian is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and Globe Trade 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 Globe Trade Centre are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Globe Trade i.e., Globe Trade and Canadian Utilities go up and down completely randomly.
Pair Corralation between Globe Trade and Canadian Utilities
If you would invest 2,279 in Canadian Utilities Limited on September 1, 2024 and sell it today you would earn a total of 120.00 from holding Canadian Utilities Limited or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Canadian Utilities Limited
Performance |
| Timeline |
| Globe Trade Centre |
| Canadian Utilities |
Globe Trade and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Canadian Utilities
The main advantage of trading using opposite Globe Trade and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Globe Trade vs. SIVERS SEMICONDUCTORS AB | Globe Trade vs. Darden Restaurants | Globe Trade vs. Reliance Steel Aluminum | Globe Trade vs. Q2M Managementberatung AG |
| Canadian Utilities vs. ATRESMEDIA | Canadian Utilities vs. Lamar Advertising | Canadian Utilities vs. CARSALESCOM | Canadian Utilities vs. PLAYTIKA HOLDING DL 01 |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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