Correlation Between Canadian Life and A W
Can any of the company-specific risk be diversified away by investing in both Canadian Life and A W 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 Canadian Life and A W into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Life Companies and A W FOOD, you can compare the effects of market volatilities on Canadian Life and A W 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 Canadian Life with a short position of A W. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Life and A W.
Diversification Opportunities for Canadian Life and A W
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canadian and A W is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Life Companies and A W FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A W FOOD and Canadian Life 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 Canadian Life Companies are associated (or correlated) with A W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A W FOOD has no effect on the direction of Canadian Life i.e., Canadian Life and A W go up and down completely randomly.
Pair Corralation between Canadian Life and A W
Assuming the 90 days trading horizon Canadian Life Companies is expected to generate 0.14 times more return on investment than A W. However, Canadian Life Companies is 7.12 times less risky than A W. It trades about 0.19 of its potential returns per unit of risk. A W FOOD is currently generating about -0.14 per unit of risk. If you would invest 980.00 in Canadian Life Companies on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Canadian Life Companies or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 21.92% |
| Values | Daily Returns |
Canadian Life Companies vs. A W FOOD
Performance |
| Timeline |
| Canadian Life Companies |
| A W FOOD |
Canadian Life and A W Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Life and A W
The main advantage of trading using opposite Canadian Life and A W positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Life position performs unexpectedly, A W 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 A W will offset losses from the drop in A W's long position.| Canadian Life vs. Brookfield | Canadian Life vs. Brookfield Asset Management | Canadian Life vs. Sprott Physical Gold | Canadian Life vs. IGM Financial |
| A W vs. Restaurant Brands International | A W vs. Restaurant Brands International | A W vs. MTY Food Group | A W vs. Boston Pizza Royalties |
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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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