Correlation Between Canlan Ice and National Bank
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and National Bank 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 National Bank 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 National Bank of, you can compare the effects of market volatilities on Canlan Ice and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and National Bank.
Diversification Opportunities for Canlan Ice and National Bank
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canlan and National is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Canlan Ice i.e., Canlan Ice and National Bank go up and down completely randomly.
Pair Corralation between Canlan Ice and National Bank
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.33 times more return on investment than National Bank. However, Canlan Ice Sports is 3.0 times less risky than National Bank. It trades about 0.22 of its potential returns per unit of risk. National Bank of is currently generating about 0.06 per unit of risk. If you would invest 388.00 in Canlan Ice Sports on November 4, 2024 and sell it today you would earn a total of 2.00 from holding Canlan Ice Sports or generate 0.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Canlan Ice Sports vs. National Bank of
Performance |
| Timeline |
| Canlan Ice Sports |
| National Bank |
Canlan Ice and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and National Bank
The main advantage of trading using opposite Canlan Ice and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. Madison Pacific Properties | Canlan Ice vs. Foraco International SA |
| National Bank vs. Computer Modelling Group | National Bank vs. Orbit Garant Drilling | National Bank vs. Canso Select Opportunities | National Bank vs. Cogeco Communications |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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