Correlation Between Gildan Activewear and Dorel Industries
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear and Dorel Industries 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 Gildan Activewear and Dorel Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Dorel Industries, you can compare the effects of market volatilities on Gildan Activewear and Dorel Industries 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 Gildan Activewear with a short position of Dorel Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Dorel Industries.
Diversification Opportunities for Gildan Activewear and Dorel Industries
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gildan and Dorel is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Dorel Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorel Industries and Gildan Activewear 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 Gildan Activewear are associated (or correlated) with Dorel Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorel Industries has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and Dorel Industries go up and down completely randomly.
Pair Corralation between Gildan Activewear and Dorel Industries
Assuming the 90 days trading horizon Gildan Activewear is expected to generate 0.37 times more return on investment than Dorel Industries. However, Gildan Activewear is 2.72 times less risky than Dorel Industries. It trades about 0.27 of its potential returns per unit of risk. Dorel Industries is currently generating about -0.39 per unit of risk. If you would invest 6,282 in Gildan Activewear on August 25, 2024 and sell it today you would earn a total of 681.00 from holding Gildan Activewear or generate 10.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Dorel Industries
Performance |
| Timeline |
| Gildan Activewear |
| Dorel Industries |
Gildan Activewear and Dorel Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Dorel Industries
The main advantage of trading using opposite Gildan Activewear and Dorel Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear position performs unexpectedly, Dorel Industries 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 Dorel Industries will offset losses from the drop in Dorel Industries' long position.| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston Limited |
| Dorel Industries vs. Transcontinental | Dorel Industries vs. Gildan Activewear | Dorel Industries vs. Cogeco Communications | Dorel Industries vs. High Liner 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |