Correlation Between Canlan Ice and Clarke
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Clarke 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 Clarke 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 Clarke Inc, you can compare the effects of market volatilities on Canlan Ice and Clarke 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 Clarke. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Clarke.
Diversification Opportunities for Canlan Ice and Clarke
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canlan and Clarke is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Clarke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarke Inc 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 Clarke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarke Inc has no effect on the direction of Canlan Ice i.e., Canlan Ice and Clarke go up and down completely randomly.
Pair Corralation between Canlan Ice and Clarke
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 2.81 times more return on investment than Clarke. However, Canlan Ice is 2.81 times more volatile than Clarke Inc. It trades about 0.28 of its potential returns per unit of risk. Clarke Inc is currently generating about -0.23 per unit of risk. If you would invest 390.00 in Canlan Ice Sports on August 24, 2024 and sell it today you would earn a total of 20.00 from holding Canlan Ice Sports or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Clarke Inc
Performance |
| Timeline |
| Canlan Ice Sports |
| Clarke Inc |
Canlan Ice and Clarke Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Clarke
The main advantage of trading using opposite Canlan Ice and Clarke positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Clarke 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 Clarke will offset losses from the drop in Clarke's long position.| Canlan Ice vs. Nickel Creek Platinum | Canlan Ice vs. Converge Technology Solutions | Canlan Ice vs. Forsys Metals Corp | Canlan Ice vs. Electra Battery Materials |
| Clarke vs. Nickel Creek Platinum | Clarke vs. Converge Technology Solutions | Clarke vs. Canlan Ice Sports | Clarke vs. Forsys Metals 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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