Correlation Between BMTC and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both BMTC 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 BMTC and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BMTC Group and Canlan Ice Sports, you can compare the effects of market volatilities on BMTC 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 BMTC with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of BMTC and Canlan Ice.
Diversification Opportunities for BMTC and Canlan Ice
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BMTC and Canlan is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BMTC 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 BMTC 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 BMTC 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 BMTC i.e., BMTC and Canlan Ice go up and down completely randomly.
Pair Corralation between BMTC and Canlan Ice
Assuming the 90 days trading horizon BMTC Group is expected to generate 0.93 times more return on investment than Canlan Ice. However, BMTC Group is 1.08 times less risky than Canlan Ice. It trades about 0.05 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.02 per unit of risk. If you would invest 1,166 in BMTC Group on August 26, 2024 and sell it today you would earn a total of 184.00 from holding BMTC Group or generate 15.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BMTC Group vs. Canlan Ice Sports
Performance |
| Timeline |
| BMTC Group |
| Canlan Ice Sports |
BMTC and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BMTC and Canlan Ice
The main advantage of trading using opposite BMTC and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BMTC 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.| BMTC vs. Leons Furniture Limited | BMTC vs. Lassonde Industries | BMTC vs. TWC Enterprises | BMTC vs. Supremex |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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