Correlation Between First Asset and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both First Asset and Picton Mahoney 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 First Asset and Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Asset Energy and Picton Mahoney Fortified, you can compare the effects of market volatilities on First Asset and Picton Mahoney 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 First Asset with a short position of Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Asset and Picton Mahoney.
Diversification Opportunities for First Asset and Picton Mahoney
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between First and Picton is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding First Asset Energy and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified and First Asset 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 First Asset Energy are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of First Asset i.e., First Asset and Picton Mahoney go up and down completely randomly.
Pair Corralation between First Asset and Picton Mahoney
Assuming the 90 days trading horizon First Asset Energy is expected to under-perform the Picton Mahoney. But the etf apears to be less risky and, when comparing its historical volatility, First Asset Energy is 1.15 times less risky than Picton Mahoney. The etf trades about -0.01 of its potential returns per unit of risk. The Picton Mahoney Fortified is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,784 in Picton Mahoney Fortified on September 3, 2024 and sell it today you would earn a total of 359.00 from holding Picton Mahoney Fortified or generate 20.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Asset Energy vs. Picton Mahoney Fortified
Performance |
| Timeline |
| First Asset Energy |
| Picton Mahoney Fortified |
First Asset and Picton Mahoney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Asset and Picton Mahoney
The main advantage of trading using opposite First Asset and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Asset position performs unexpectedly, Picton Mahoney 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 Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.| First Asset vs. CI Gold Giants | First Asset vs. First Asset Tech | First Asset vs. CI Canada Lifeco | First Asset vs. Harvest Healthcare Leaders |
| Picton Mahoney vs. First Asset Energy | Picton Mahoney vs. First Asset Tech | Picton Mahoney vs. Harvest Equal Weight | Picton Mahoney vs. CI Canada Lifeco |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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