Correlation Between NorthWest Healthcare and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both NorthWest Healthcare and Canlan Ice 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 NorthWest Healthcare and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorthWest Healthcare Properties and Canlan Ice Sports, you can compare the effects of market volatilities on NorthWest Healthcare and Canlan Ice 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 NorthWest Healthcare with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorthWest Healthcare and Canlan Ice.
Diversification Opportunities for NorthWest Healthcare and Canlan Ice
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NorthWest and Canlan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding NorthWest Healthcare Propertie and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and NorthWest Healthcare 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 NorthWest Healthcare Properties are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of NorthWest Healthcare i.e., NorthWest Healthcare and Canlan Ice go up and down completely randomly.
Pair Corralation between NorthWest Healthcare and Canlan Ice
Assuming the 90 days trading horizon NorthWest Healthcare Properties is expected to under-perform the Canlan Ice. In addition to that, NorthWest Healthcare is 1.14 times more volatile than Canlan Ice Sports. It trades about -0.03 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.01 per unit of volatility. If you would invest 395.00 in Canlan Ice Sports on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Canlan Ice Sports or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NorthWest Healthcare Propertie vs. Canlan Ice Sports
Performance |
| Timeline |
| NorthWest Healthcare |
| Canlan Ice Sports |
NorthWest Healthcare and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorthWest Healthcare and Canlan Ice
The main advantage of trading using opposite NorthWest Healthcare and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorthWest Healthcare position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| NorthWest Healthcare vs. InterRent Real Estate | NorthWest Healthcare vs. Canadian Apartment Properties | NorthWest Healthcare vs. Granite Real Estate | NorthWest Healthcare vs. Crombie Real Estate |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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