Correlation Between Canlan Ice and Diamond Estates
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Diamond Estates 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 Diamond Estates 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 Diamond Estates Wines, you can compare the effects of market volatilities on Canlan Ice and Diamond Estates 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 Diamond Estates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Diamond Estates.
Diversification Opportunities for Canlan Ice and Diamond Estates
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canlan and Diamond is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Diamond Estates Wines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamond Estates Wines 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 Diamond Estates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamond Estates Wines has no effect on the direction of Canlan Ice i.e., Canlan Ice and Diamond Estates go up and down completely randomly.
Pair Corralation between Canlan Ice and Diamond Estates
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.29 times more return on investment than Diamond Estates. However, Canlan Ice Sports is 3.42 times less risky than Diamond Estates. It trades about 0.0 of its potential returns per unit of risk. Diamond Estates Wines is currently generating about -0.01 per unit of risk. If you would invest 424.00 in Canlan Ice Sports on September 12, 2024 and sell it today you would lose (15.00) from holding Canlan Ice Sports or give up 3.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Diamond Estates Wines
Performance |
| Timeline |
| Canlan Ice Sports |
| Diamond Estates Wines |
Canlan Ice and Diamond Estates Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Diamond Estates
The main advantage of trading using opposite Canlan Ice and Diamond Estates positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Diamond Estates 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 Diamond Estates will offset losses from the drop in Diamond Estates' long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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