Correlation Between BetaPro Canadian and BetaPro Natural
Can any of the company-specific risk be diversified away by investing in both BetaPro Canadian and BetaPro Natural 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 BetaPro Canadian and BetaPro Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Canadian Gold and BetaPro Natural Gas, you can compare the effects of market volatilities on BetaPro Canadian and BetaPro Natural 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 BetaPro Canadian with a short position of BetaPro Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Canadian and BetaPro Natural.
Diversification Opportunities for BetaPro Canadian and BetaPro Natural
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BetaPro and BetaPro is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and BetaPro Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Natural Gas and BetaPro Canadian 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 BetaPro Canadian Gold are associated (or correlated) with BetaPro Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Natural Gas has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and BetaPro Natural go up and down completely randomly.
Pair Corralation between BetaPro Canadian and BetaPro Natural
Assuming the 90 days trading horizon BetaPro Canadian Gold is expected to under-perform the BetaPro Natural. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro Canadian Gold is 1.85 times less risky than BetaPro Natural. The etf trades about -0.14 of its potential returns per unit of risk. The BetaPro Natural Gas is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 8,203 in BetaPro Natural Gas on August 25, 2024 and sell it today you would lose (608.00) from holding BetaPro Natural Gas or give up 7.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Canadian Gold vs. BetaPro Natural Gas
Performance |
| Timeline |
| BetaPro Canadian Gold |
| BetaPro Natural Gas |
BetaPro Canadian and BetaPro Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Canadian and BetaPro Natural
The main advantage of trading using opposite BetaPro Canadian and BetaPro Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Canadian position performs unexpectedly, BetaPro Natural 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 BetaPro Natural will offset losses from the drop in BetaPro Natural's long position.| BetaPro Canadian vs. BetaPro Gold Bullion | BetaPro Canadian vs. BetaPro NASDAQ 100 2x | BetaPro Canadian vs. BetaPro SP TSX | BetaPro Canadian vs. BetaPro SP TSX |
| BetaPro Natural vs. BetaPro Natural Gas | BetaPro Natural vs. BetaPro Crude Oil | BetaPro Natural vs. BetaPro Canadian Gold | BetaPro Natural vs. BetaPro Crude Oil |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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