Correlation Between Goeasy and Aritzia
Can any of the company-specific risk be diversified away by investing in both Goeasy and Aritzia 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 Goeasy and Aritzia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between goeasy and Aritzia, you can compare the effects of market volatilities on Goeasy and Aritzia 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 Goeasy with a short position of Aritzia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goeasy and Aritzia.
Diversification Opportunities for Goeasy and Aritzia
Very weak diversification
The 3 months correlation between Goeasy and Aritzia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding goeasy and Aritzia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aritzia and Goeasy 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 goeasy are associated (or correlated) with Aritzia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aritzia has no effect on the direction of Goeasy i.e., Goeasy and Aritzia go up and down completely randomly.
Pair Corralation between Goeasy and Aritzia
Assuming the 90 days trading horizon Goeasy is expected to generate 3.89 times less return on investment than Aritzia. But when comparing it to its historical volatility, goeasy is 2.46 times less risky than Aritzia. It trades about 0.14 of its potential returns per unit of risk. Aritzia is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,760 in Aritzia on November 4, 2024 and sell it today you would earn a total of 1,230 from holding Aritzia or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
goeasy vs. Aritzia
Performance |
| Timeline |
| goeasy |
| Aritzia |
Goeasy and Aritzia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goeasy and Aritzia
The main advantage of trading using opposite Goeasy and Aritzia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goeasy position performs unexpectedly, Aritzia 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 Aritzia will offset losses from the drop in Aritzia's long position.| Goeasy vs. Exco Technologies Limited | Goeasy vs. T2 Metals Corp | Goeasy vs. Northstar Clean Technologies | Goeasy vs. Sangoma Technologies Corp |
| Aritzia vs. Canada Goose Holdings | Aritzia vs. Restaurant Brands International | Aritzia vs. Lightspeed Commerce | Aritzia vs. goeasy |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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