Correlation Between Canlan Ice and Automotive Finco
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Automotive Finco 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 Canlan Ice and Automotive Finco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Automotive Finco Corp, you can compare the effects of market volatilities on Canlan Ice and Automotive Finco 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 Canlan Ice with a short position of Automotive Finco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Automotive Finco.
Diversification Opportunities for Canlan Ice and Automotive Finco
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canlan and Automotive is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Automotive Finco Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automotive Finco Corp and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Automotive Finco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automotive Finco Corp has no effect on the direction of Canlan Ice i.e., Canlan Ice and Automotive Finco go up and down completely randomly.
Pair Corralation between Canlan Ice and Automotive Finco
Assuming the 90 days trading horizon Canlan Ice is expected to generate 5080.0 times less return on investment than Automotive Finco. But when comparing it to its historical volatility, Canlan Ice Sports is 23.2 times less risky than Automotive Finco. It trades about 0.0 of its potential returns per unit of risk. Automotive Finco Corp is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 81.00 in Automotive Finco Corp on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Automotive Finco Corp or generate 9.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Automotive Finco Corp
Performance |
| Timeline |
| Canlan Ice Sports |
| Automotive Finco Corp |
Canlan Ice and Automotive Finco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Automotive Finco
The main advantage of trading using opposite Canlan Ice and Automotive Finco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Automotive Finco 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 Automotive Finco will offset losses from the drop in Automotive Finco's long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
| Automotive Finco vs. Brookfield Investments | Automotive Finco vs. Canaf Investments | Automotive Finco vs. SalesforceCom CDR | Automotive Finco vs. Canlan Ice Sports |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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