Correlation Between Canlan Ice and NGEx Minerals
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and NGEx Minerals 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 NGEx Minerals 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 NGEx Minerals, you can compare the effects of market volatilities on Canlan Ice and NGEx Minerals 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 NGEx Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and NGEx Minerals.
Diversification Opportunities for Canlan Ice and NGEx Minerals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and NGEx is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and NGEx Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGEx Minerals 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 NGEx Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGEx Minerals has no effect on the direction of Canlan Ice i.e., Canlan Ice and NGEx Minerals go up and down completely randomly.
Pair Corralation between Canlan Ice and NGEx Minerals
Assuming the 90 days trading horizon Canlan Ice is expected to generate 1.1 times less return on investment than NGEx Minerals. But when comparing it to its historical volatility, Canlan Ice Sports is 2.64 times less risky than NGEx Minerals. It trades about 0.28 of its potential returns per unit of risk. NGEx Minerals is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,174 in NGEx Minerals on August 30, 2024 and sell it today you would earn a total of 64.00 from holding NGEx Minerals or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canlan Ice Sports vs. NGEx Minerals
Performance |
| Timeline |
| Canlan Ice Sports |
| NGEx Minerals |
Canlan Ice and NGEx Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and NGEx Minerals
The main advantage of trading using opposite Canlan Ice and NGEx Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, NGEx Minerals 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 NGEx Minerals will offset losses from the drop in NGEx Minerals' long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
| NGEx Minerals vs. Canlan Ice Sports | NGEx Minerals vs. SalesforceCom CDR | NGEx Minerals vs. Algonquin Power Utilities | NGEx Minerals vs. Faction Investment Group |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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