Correlation Between Canlan Ice and Exxon
Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Exxon 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 Exxon 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 EXXON MOBIL CDR, you can compare the effects of market volatilities on Canlan Ice and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Exxon.
Diversification Opportunities for Canlan Ice and Exxon
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canlan and Exxon is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and EXXON MOBIL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL CDR 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL CDR has no effect on the direction of Canlan Ice i.e., Canlan Ice and Exxon go up and down completely randomly.
Pair Corralation between Canlan Ice and Exxon
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.24 times more return on investment than Exxon. However, Canlan Ice Sports is 4.2 times less risky than Exxon. It trades about -0.21 of its potential returns per unit of risk. EXXON MOBIL CDR is currently generating about -0.46 per unit of risk. If you would invest 410.00 in Canlan Ice Sports on September 19, 2024 and sell it today you would lose (5.00) from holding Canlan Ice Sports or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. EXXON MOBIL CDR
Performance |
| Timeline |
| Canlan Ice Sports |
| EXXON MOBIL CDR |
Canlan Ice and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Exxon
The main advantage of trading using opposite Canlan Ice and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Foraco International SA | Canlan Ice vs. iShares Canadian HYBrid | Canlan Ice vs. Altagas Cum Red |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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