Correlation Between Canlan Ice and Income Financial
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Income Financial 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 Income Financial 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 Income Financial Trust, you can compare the effects of market volatilities on Canlan Ice and Income Financial 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 Income Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Income Financial.
Diversification Opportunities for Canlan Ice and Income Financial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canlan and Income is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Income Financial Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Financial Trust 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 Income Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Financial Trust has no effect on the direction of Canlan Ice i.e., Canlan Ice and Income Financial go up and down completely randomly.
Pair Corralation between Canlan Ice and Income Financial
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.97 times more return on investment than Income Financial. However, Canlan Ice Sports is 1.03 times less risky than Income Financial. It trades about 0.02 of its potential returns per unit of risk. Income Financial Trust is currently generating about 0.0 per unit of risk. If you would invest 381.00 in Canlan Ice Sports on August 26, 2024 and sell it today you would earn a total of 29.00 from holding Canlan Ice Sports or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Income Financial Trust
Performance |
| Timeline |
| Canlan Ice Sports |
| Income Financial Trust |
Canlan Ice and Income Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Income Financial
The main advantage of trading using opposite Canlan Ice and Income Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Income Financial 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 Income Financial will offset losses from the drop in Income Financial'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 |
| Income Financial vs. NVIDIA CDR | Income Financial vs. Apple Inc CDR | Income Financial vs. Microsoft Corp CDR | Income Financial vs. Amazon CDR |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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