Correlation Between Information Services and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Information Services and Canadian Utilities 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 Information Services and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Information Services and Canadian Utilities Ltd, you can compare the effects of market volatilities on Information Services and Canadian Utilities 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 Information Services with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Information Services and Canadian Utilities.
Diversification Opportunities for Information Services and Canadian Utilities
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Information and Canadian is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Information Services and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and Information Services 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 Information Services are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Information Services i.e., Information Services and Canadian Utilities go up and down completely randomly.
Pair Corralation between Information Services and Canadian Utilities
Assuming the 90 days trading horizon Information Services is expected to generate 11.41 times less return on investment than Canadian Utilities. In addition to that, Information Services is 2.51 times more volatile than Canadian Utilities Ltd. It trades about 0.01 of its total potential returns per unit of risk. Canadian Utilities Ltd is currently generating about 0.18 per unit of volatility. If you would invest 2,439 in Canadian Utilities Ltd on September 14, 2024 and sell it today you would earn a total of 36.00 from holding Canadian Utilities Ltd or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Information Services vs. Canadian Utilities Ltd
Performance |
| Timeline |
| Information Services |
| Canadian Utilities |
Information Services and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Information Services and Canadian Utilities
The main advantage of trading using opposite Information Services and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Information Services position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Information Services vs. Ritchie Bros Auctioneers | Information Services vs. Transcontinental | Information Services vs. GDI Integrated | Information Services vs. Calian Technologies |
| Canadian Utilities vs. Microsoft Corp CDR | Canadian Utilities vs. Apple Inc CDR | Canadian Utilities vs. Alphabet Inc CDR | Canadian Utilities vs. Amazon CDR |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |