Correlation Between Canada Goose and Roots Corp
Can any of the company-specific risk be diversified away by investing in both Canada Goose and Roots Corp 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 Canada Goose and Roots Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Goose Holdings and Roots Corp, you can compare the effects of market volatilities on Canada Goose and Roots Corp 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 Canada Goose with a short position of Roots Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Roots Corp.
Diversification Opportunities for Canada Goose and Roots Corp
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canada and Roots is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Roots Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roots Corp and Canada Goose 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 Canada Goose Holdings are associated (or correlated) with Roots Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roots Corp has no effect on the direction of Canada Goose i.e., Canada Goose and Roots Corp go up and down completely randomly.
Pair Corralation between Canada Goose and Roots Corp
Assuming the 90 days trading horizon Canada Goose Holdings is expected to under-perform the Roots Corp. In addition to that, Canada Goose is 1.22 times more volatile than Roots Corp. It trades about -0.11 of its total potential returns per unit of risk. Roots Corp is currently generating about 0.0 per unit of volatility. If you would invest 224.00 in Roots Corp on August 29, 2024 and sell it today you would lose (6.00) from holding Roots Corp or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Goose Holdings vs. Roots Corp
Performance |
| Timeline |
| Canada Goose Holdings |
| Roots Corp |
Canada Goose and Roots Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Goose and Roots Corp
The main advantage of trading using opposite Canada Goose and Roots Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose position performs unexpectedly, Roots Corp 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 Roots Corp will offset losses from the drop in Roots Corp's long position.| Canada Goose vs. Aritzia | Canada Goose vs. Restaurant Brands International | Canada Goose vs. Dollarama | Canada Goose vs. Shopify |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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