Correlation Between Canlan Ice and Great West
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Great West 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 Great West 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 Great West Lifeco, you can compare the effects of market volatilities on Canlan Ice and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Great West.
Diversification Opportunities for Canlan Ice and Great West
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canlan and Great is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Canlan Ice i.e., Canlan Ice and Great West go up and down completely randomly.
Pair Corralation between Canlan Ice and Great West
Assuming the 90 days trading horizon Canlan Ice is expected to generate 1.12 times less return on investment than Great West. In addition to that, Canlan Ice is 2.54 times more volatile than Great West Lifeco. It trades about 0.02 of its total potential returns per unit of risk. Great West Lifeco is currently generating about 0.06 per unit of volatility. If you would invest 1,799 in Great West Lifeco on September 13, 2024 and sell it today you would earn a total of 404.00 from holding Great West Lifeco or generate 22.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Canlan Ice Sports vs. Great West Lifeco
Performance |
| Timeline |
| Canlan Ice Sports |
| Great West Lifeco |
Canlan Ice and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Great West
The main advantage of trading using opposite Canlan Ice and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Foraco International SA | Canlan Ice vs. iShares Canadian HYBrid |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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