Correlation Between Canlan Ice and TMX Group
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and TMX Group 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 TMX Group 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 TMX Group Limited, you can compare the effects of market volatilities on Canlan Ice and TMX Group 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 TMX Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and TMX Group.
Diversification Opportunities for Canlan Ice and TMX Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and TMX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and TMX Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMX Group Limited 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 TMX Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMX Group Limited has no effect on the direction of Canlan Ice i.e., Canlan Ice and TMX Group go up and down completely randomly.
Pair Corralation between Canlan Ice and TMX Group
Assuming the 90 days trading horizon Canlan Ice is expected to generate 1.62 times less return on investment than TMX Group. In addition to that, Canlan Ice is 1.63 times more volatile than TMX Group Limited. It trades about 0.07 of its total potential returns per unit of risk. TMX Group Limited is currently generating about 0.19 per unit of volatility. If you would invest 4,209 in TMX Group Limited on September 5, 2024 and sell it today you would earn a total of 284.00 from holding TMX Group Limited or generate 6.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. TMX Group Limited
Performance |
| Timeline |
| Canlan Ice Sports |
| TMX Group Limited |
Canlan Ice and TMX Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and TMX Group
The main advantage of trading using opposite Canlan Ice and TMX Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, TMX Group 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 TMX Group will offset losses from the drop in TMX Group'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 |
| TMX Group vs. Firan Technology Group | TMX Group vs. American Hotel Income | TMX Group vs. CVW CleanTech | TMX Group vs. Canlan Ice Sports |
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 Stocks Directory module to find actively traded stocks across global markets.
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