Correlation Between Leons Furniture and Canso Select
Can any of the company-specific risk be diversified away by investing in both Leons Furniture and Canso Select 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 Leons Furniture and Canso Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leons Furniture Limited and Canso Select Opportunities, you can compare the effects of market volatilities on Leons Furniture and Canso Select 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 Leons Furniture with a short position of Canso Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leons Furniture and Canso Select.
Diversification Opportunities for Leons Furniture and Canso Select
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Leons and Canso is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Leons Furniture Limited and Canso Select Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Select Opportu and Leons Furniture 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 Leons Furniture Limited are associated (or correlated) with Canso Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Select Opportu has no effect on the direction of Leons Furniture i.e., Leons Furniture and Canso Select go up and down completely randomly.
Pair Corralation between Leons Furniture and Canso Select
Assuming the 90 days trading horizon Leons Furniture Limited is expected to generate 0.43 times more return on investment than Canso Select. However, Leons Furniture Limited is 2.33 times less risky than Canso Select. It trades about -0.15 of its potential returns per unit of risk. Canso Select Opportunities is currently generating about -0.29 per unit of risk. If you would invest 2,758 in Leons Furniture Limited on August 29, 2024 and sell it today you would lose (118.00) from holding Leons Furniture Limited or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leons Furniture Limited vs. Canso Select Opportunities
Performance |
| Timeline |
| Leons Furniture |
| Canso Select Opportu |
Leons Furniture and Canso Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leons Furniture and Canso Select
The main advantage of trading using opposite Leons Furniture and Canso Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leons Furniture position performs unexpectedly, Canso Select 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 Canso Select will offset losses from the drop in Canso Select's long position.| Leons Furniture vs. Telus Corp | Leons Furniture vs. Toronto Dominion Bank | Leons Furniture vs. Manulife Financial Corp | Leons Furniture vs. Canadian Natural Resources |
| Canso Select vs. NVIDIA CDR | Canso Select vs. Apple Inc CDR | Canso Select vs. Microsoft Corp CDR | Canso Select 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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