Correlation Between Canlan Ice and IFabric Corp
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and IFabric Corp 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 IFabric Corp 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 iFabric Corp, you can compare the effects of market volatilities on Canlan Ice and IFabric Corp 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 IFabric Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and IFabric Corp.
Diversification Opportunities for Canlan Ice and IFabric Corp
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canlan and IFabric is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and iFabric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iFabric 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 IFabric Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iFabric Corp has no effect on the direction of Canlan Ice i.e., Canlan Ice and IFabric Corp go up and down completely randomly.
Pair Corralation between Canlan Ice and IFabric Corp
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.18 times more return on investment than IFabric Corp. However, Canlan Ice Sports is 5.6 times less risky than IFabric Corp. It trades about 0.25 of its potential returns per unit of risk. iFabric Corp is currently generating about -0.11 per unit of risk. If you would invest 380.00 in Canlan Ice Sports on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Canlan Ice Sports or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. iFabric Corp
Performance |
| Timeline |
| Canlan Ice Sports |
| iFabric Corp |
Canlan Ice and IFabric Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and IFabric Corp
The main advantage of trading using opposite Canlan Ice and IFabric Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, IFabric Corp 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 IFabric Corp will offset losses from the drop in IFabric Corp'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 |
| IFabric Corp vs. Caldwell Partners International | IFabric Corp vs. Bri Chem Corp | IFabric Corp vs. Geodrill Limited | IFabric Corp vs. Supremex |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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