Correlation Between Canada Goose and MCBC Holdings
Can any of the company-specific risk be diversified away by investing in both Canada Goose and MCBC Holdings 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 MCBC Holdings 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 MCBC Holdings, you can compare the effects of market volatilities on Canada Goose and MCBC Holdings 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 MCBC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and MCBC Holdings.
Diversification Opportunities for Canada Goose and MCBC Holdings
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canada and MCBC is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Canada Goose i.e., Canada Goose and MCBC Holdings go up and down completely randomly.
Pair Corralation between Canada Goose and MCBC Holdings
Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 1.07 times more return on investment than MCBC Holdings. However, Canada Goose is 1.07 times more volatile than MCBC Holdings. It trades about 0.19 of its potential returns per unit of risk. MCBC Holdings is currently generating about -0.11 per unit of risk. If you would invest 944.00 in Canada Goose Holdings on September 19, 2024 and sell it today you would earn a total of 66.00 from holding Canada Goose Holdings or generate 6.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canada Goose Holdings vs. MCBC Holdings
Performance |
Timeline |
Canada Goose Holdings |
MCBC Holdings |
Canada Goose and MCBC Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canada Goose and MCBC Holdings
The main advantage of trading using opposite Canada Goose and MCBC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Goose position performs unexpectedly, MCBC Holdings 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 MCBC Holdings will offset losses from the drop in MCBC Holdings' long position.Canada Goose vs. Digital Brands Group | ||
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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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