Correlation Between Canlan Ice and Labrador Iron
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Labrador Iron 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 Labrador Iron 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 Labrador Iron Ore, you can compare the effects of market volatilities on Canlan Ice and Labrador Iron 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 Labrador Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Labrador Iron.
Diversification Opportunities for Canlan Ice and Labrador Iron
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canlan and Labrador is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Labrador Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labrador Iron Ore 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 Labrador Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labrador Iron Ore has no effect on the direction of Canlan Ice i.e., Canlan Ice and Labrador Iron go up and down completely randomly.
Pair Corralation between Canlan Ice and Labrador Iron
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 1.33 times more return on investment than Labrador Iron. However, Canlan Ice is 1.33 times more volatile than Labrador Iron Ore. It trades about 0.06 of its potential returns per unit of risk. Labrador Iron Ore is currently generating about 0.05 per unit of risk. If you would invest 371.00 in Canlan Ice Sports on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Canlan Ice Sports or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Labrador Iron Ore
Performance |
| Timeline |
| Canlan Ice Sports |
| Labrador Iron Ore |
Canlan Ice and Labrador Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Labrador Iron
The main advantage of trading using opposite Canlan Ice and Labrador Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Labrador Iron 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 Labrador Iron will offset losses from the drop in Labrador Iron'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 |
| Labrador Iron vs. Keyera Corp | Labrador Iron vs. Russel Metals | Labrador Iron vs. Freehold Royalties | Labrador Iron vs. Capital Power |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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