Correlation Between HPQ Silicon and Canadian Western
Can any of the company-specific risk be diversified away by investing in both HPQ Silicon and Canadian Western 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 HPQ Silicon and Canadian Western into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HPQ Silicon Resources and Canadian Western Bank, you can compare the effects of market volatilities on HPQ Silicon and Canadian Western 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 HPQ Silicon with a short position of Canadian Western. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPQ Silicon and Canadian Western.
Diversification Opportunities for HPQ Silicon and Canadian Western
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HPQ and Canadian is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding HPQ Silicon Resources and Canadian Western Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Western Bank and HPQ Silicon 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 HPQ Silicon Resources are associated (or correlated) with Canadian Western. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Western Bank has no effect on the direction of HPQ Silicon i.e., HPQ Silicon and Canadian Western go up and down completely randomly.
Pair Corralation between HPQ Silicon and Canadian Western
Assuming the 90 days horizon HPQ Silicon is expected to generate 3.99 times less return on investment than Canadian Western. In addition to that, HPQ Silicon is 1.2 times more volatile than Canadian Western Bank. It trades about 0.01 of its total potential returns per unit of risk. Canadian Western Bank is currently generating about 0.07 per unit of volatility. If you would invest 2,355 in Canadian Western Bank on October 21, 2024 and sell it today you would earn a total of 3,425 from holding Canadian Western Bank or generate 145.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HPQ Silicon Resources vs. Canadian Western Bank
Performance |
| Timeline |
| HPQ Silicon Resources |
| Canadian Western Bank |
HPQ Silicon and Canadian Western Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HPQ Silicon and Canadian Western
The main advantage of trading using opposite HPQ Silicon and Canadian Western positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HPQ Silicon position performs unexpectedly, Canadian Western 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 Canadian Western will offset losses from the drop in Canadian Western's long position.| HPQ Silicon vs. PyroGenesis Canada | HPQ Silicon vs. Nouveau Monde Graphite | HPQ Silicon vs. Solar Alliance Energy | HPQ Silicon vs. Braille Energy Systems |
| Canadian Western vs. Laurentian Bank | Canadian Western vs. National Bank of | Canadian Western vs. Great West Lifeco | Canadian Western vs. CI Financial Corp |
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 Stocks Directory module to find actively traded stocks across global markets.
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