Correlation Between Canlan Ice and Restaurant Brands
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Restaurant Brands 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 Restaurant Brands 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 Restaurant Brands International, you can compare the effects of market volatilities on Canlan Ice and Restaurant Brands 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 Restaurant Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Restaurant Brands.
Diversification Opportunities for Canlan Ice and Restaurant Brands
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Canlan and Restaurant is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Restaurant Brands Internationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Restaurant Brands 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 Restaurant Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Restaurant Brands has no effect on the direction of Canlan Ice i.e., Canlan Ice and Restaurant Brands go up and down completely randomly.
Pair Corralation between Canlan Ice and Restaurant Brands
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.74 times more return on investment than Restaurant Brands. However, Canlan Ice Sports is 1.35 times less risky than Restaurant Brands. It trades about 0.28 of its potential returns per unit of risk. Restaurant Brands International is currently generating about -0.16 per unit of risk. If you would invest 390.00 in Canlan Ice Sports on August 24, 2024 and sell it today you would earn a total of 20.00 from holding Canlan Ice Sports or generate 5.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Canlan Ice Sports vs. Restaurant Brands Internationa
Performance |
| Timeline |
| Canlan Ice Sports |
| Restaurant Brands |
Canlan Ice and Restaurant Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Restaurant Brands
The main advantage of trading using opposite Canlan Ice and Restaurant Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Restaurant Brands 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 Restaurant Brands will offset losses from the drop in Restaurant Brands' long position.| Canlan Ice vs. Restaurant Brands International | Canlan Ice vs. Enghouse Systems | Canlan Ice vs. Metro Inc | Canlan Ice vs. goeasy |
| Restaurant Brands vs. Canadian Tire | Restaurant Brands vs. Dollarama | Restaurant Brands vs. Nutrien | Restaurant Brands vs. Magna International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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