Correlation Between Canlan Ice and Medical Facilities
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Medical Facilities 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 Medical Facilities 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 Medical Facilities, you can compare the effects of market volatilities on Canlan Ice and Medical Facilities 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 Medical Facilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Medical Facilities.
Diversification Opportunities for Canlan Ice and Medical Facilities
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and Medical is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Medical Facilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Facilities 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 Medical Facilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Facilities has no effect on the direction of Canlan Ice i.e., Canlan Ice and Medical Facilities go up and down completely randomly.
Pair Corralation between Canlan Ice and Medical Facilities
Assuming the 90 days trading horizon Canlan Ice is expected to generate 4.94 times less return on investment than Medical Facilities. In addition to that, Canlan Ice is 1.33 times more volatile than Medical Facilities. It trades about 0.02 of its total potential returns per unit of risk. Medical Facilities is currently generating about 0.13 per unit of volatility. If you would invest 779.00 in Medical Facilities on August 31, 2024 and sell it today you would earn a total of 791.00 from holding Medical Facilities or generate 101.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Medical Facilities
Performance |
| Timeline |
| Canlan Ice Sports |
| Medical Facilities |
Canlan Ice and Medical Facilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Medical Facilities
The main advantage of trading using opposite Canlan Ice and Medical Facilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Medical Facilities 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 Medical Facilities will offset losses from the drop in Medical Facilities' long position.| Canlan Ice vs. Berkshire Hathaway CDR | Canlan Ice vs. JPMorgan Chase Co | Canlan Ice vs. Bank of America | Canlan Ice vs. Alphabet Inc CDR |
| Medical Facilities vs. iShares Canadian HYBrid | Medical Facilities vs. Brompton European Dividend | Medical Facilities vs. Solar Alliance Energy | Medical Facilities vs. PHN Multi Style All Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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