Correlation Between Canlan Ice and Sage Potash
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Sage Potash 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 Sage Potash 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 Sage Potash Corp, you can compare the effects of market volatilities on Canlan Ice and Sage Potash 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 Sage Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Sage Potash.
Diversification Opportunities for Canlan Ice and Sage Potash
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canlan and Sage is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Sage Potash Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Potash Corp 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 Sage Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Potash Corp has no effect on the direction of Canlan Ice i.e., Canlan Ice and Sage Potash go up and down completely randomly.
Pair Corralation between Canlan Ice and Sage Potash
Assuming the 90 days trading horizon Canlan Ice is expected to generate 19.71 times less return on investment than Sage Potash. But when comparing it to its historical volatility, Canlan Ice Sports is 5.82 times less risky than Sage Potash. It trades about 0.02 of its potential returns per unit of risk. Sage Potash Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Sage Potash Corp on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Sage Potash Corp or generate 33.33% 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. Sage Potash Corp
Performance |
| Timeline |
| Canlan Ice Sports |
| Sage Potash Corp |
Canlan Ice and Sage Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Sage Potash
The main advantage of trading using opposite Canlan Ice and Sage Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Sage Potash 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 Sage Potash will offset losses from the drop in Sage Potash'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 |
| Sage Potash vs. North American Construction | Sage Potash vs. Arizona Metals Corp | Sage Potash vs. Canlan Ice Sports | Sage Potash vs. TGS Esports |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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