Correlation Between Mason Graphite and Canada Carbon
Can any of the company-specific risk be diversified away by investing in both Mason Graphite and Canada Carbon 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 Mason Graphite and Canada Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mason Graphite and Canada Carbon, you can compare the effects of market volatilities on Mason Graphite and Canada Carbon 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 Mason Graphite with a short position of Canada Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mason Graphite and Canada Carbon.
Diversification Opportunities for Mason Graphite and Canada Carbon
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mason and Canada is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Canada Carbon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Carbon and Mason Graphite 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 Mason Graphite are associated (or correlated) with Canada Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Carbon has no effect on the direction of Mason Graphite i.e., Mason Graphite and Canada Carbon go up and down completely randomly.
Pair Corralation between Mason Graphite and Canada Carbon
Assuming the 90 days horizon Mason Graphite is expected to under-perform the Canada Carbon. But the stock apears to be less risky and, when comparing its historical volatility, Mason Graphite is 2.33 times less risky than Canada Carbon. The stock trades about -0.01 of its potential returns per unit of risk. The Canada Carbon is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Canada Carbon on September 3, 2024 and sell it today you would lose (6.50) from holding Canada Carbon or give up 81.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mason Graphite vs. Canada Carbon
Performance |
| Timeline |
| Mason Graphite |
| Canada Carbon |
Mason Graphite and Canada Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mason Graphite and Canada Carbon
The main advantage of trading using opposite Mason Graphite and Canada Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mason Graphite position performs unexpectedly, Canada Carbon 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 Canada Carbon will offset losses from the drop in Canada Carbon's long position.| Mason Graphite vs. Focus Graphite | Mason Graphite vs. Northern Graphite | Mason Graphite vs. Lomiko Metals | Mason Graphite vs. Nouveau Monde Graphite |
| Canada Carbon vs. Graphite One | Canada Carbon vs. ExGen Resources | Canada Carbon vs. Cariboo Rose Resources | Canada Carbon vs. Black Mammoth Metals |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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