Correlation Between Canlan Ice and Pentagon I
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Pentagon I 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 Pentagon I 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 Pentagon I Capital, you can compare the effects of market volatilities on Canlan Ice and Pentagon I 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 Pentagon I. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Pentagon I.
Diversification Opportunities for Canlan Ice and Pentagon I
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Canlan and Pentagon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Pentagon I Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pentagon I Capital 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 Pentagon I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pentagon I Capital has no effect on the direction of Canlan Ice i.e., Canlan Ice and Pentagon I go up and down completely randomly.
Pair Corralation between Canlan Ice and Pentagon I
Assuming the 90 days trading horizon Canlan Ice is expected to generate 5.62 times less return on investment than Pentagon I. But when comparing it to its historical volatility, Canlan Ice Sports is 4.21 times less risky than Pentagon I. It trades about 0.02 of its potential returns per unit of risk. Pentagon I Capital is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Pentagon I Capital on September 4, 2024 and sell it today you would lose (3.00) from holding Pentagon I Capital or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Pentagon I Capital
Performance |
| Timeline |
| Canlan Ice Sports |
| Pentagon I Capital |
Canlan Ice and Pentagon I Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Pentagon I
The main advantage of trading using opposite Canlan Ice and Pentagon I positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Pentagon I 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 Pentagon I will offset losses from the drop in Pentagon I'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 |
| Pentagon I vs. Information Services | Pentagon I vs. Constellation Software | Pentagon I vs. Firan Technology Group | Pentagon I vs. Labrador Iron Ore |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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