Correlation Between Redishred Capital and Extendicare
Can any of the company-specific risk be diversified away by investing in both Redishred Capital and Extendicare 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 Redishred Capital and Extendicare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redishred Capital Corp and Extendicare, you can compare the effects of market volatilities on Redishred Capital and Extendicare 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 Redishred Capital with a short position of Extendicare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redishred Capital and Extendicare.
Diversification Opportunities for Redishred Capital and Extendicare
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Redishred and Extendicare is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Redishred Capital Corp and Extendicare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extendicare and Redishred Capital 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 Redishred Capital Corp are associated (or correlated) with Extendicare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extendicare has no effect on the direction of Redishred Capital i.e., Redishred Capital and Extendicare go up and down completely randomly.
Pair Corralation between Redishred Capital and Extendicare
Assuming the 90 days horizon Redishred Capital Corp is expected to generate 0.16 times more return on investment than Extendicare. However, Redishred Capital Corp is 6.19 times less risky than Extendicare. It trades about 0.19 of its potential returns per unit of risk. Extendicare is currently generating about 0.02 per unit of risk. If you would invest 488.00 in Redishred Capital Corp on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Redishred Capital Corp or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redishred Capital Corp vs. Extendicare
Performance |
| Timeline |
| Redishred Capital Corp |
| Extendicare |
Redishred Capital and Extendicare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redishred Capital and Extendicare
The main advantage of trading using opposite Redishred Capital and Extendicare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redishred Capital position performs unexpectedly, Extendicare 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 Extendicare will offset losses from the drop in Extendicare's long position.| Redishred Capital vs. Kodiak Copper Corp | Redishred Capital vs. Atlas Engineered Products | Redishred Capital vs. FP Newspapers | Redishred Capital vs. NamSys Inc |
| Extendicare vs. Sienna Senior Living | Extendicare vs. Chartwell Retirement Residences | Extendicare vs. Chemtrade Logistics Income | Extendicare vs. NorthWest Healthcare Properties |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |