Correlation Between Canso Credit and Golden Pursuit
Can any of the company-specific risk be diversified away by investing in both Canso Credit and Golden Pursuit 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 Canso Credit and Golden Pursuit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canso Credit Trust and Golden Pursuit Resources, you can compare the effects of market volatilities on Canso Credit and Golden Pursuit 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 Canso Credit with a short position of Golden Pursuit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canso Credit and Golden Pursuit.
Diversification Opportunities for Canso Credit and Golden Pursuit
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Canso and Golden is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canso Credit Trust and Golden Pursuit Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Pursuit Resources and Canso Credit 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 Canso Credit Trust are associated (or correlated) with Golden Pursuit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Pursuit Resources has no effect on the direction of Canso Credit i.e., Canso Credit and Golden Pursuit go up and down completely randomly.
Pair Corralation between Canso Credit and Golden Pursuit
Assuming the 90 days trading horizon Canso Credit is expected to generate 2.31 times less return on investment than Golden Pursuit. But when comparing it to its historical volatility, Canso Credit Trust is 11.64 times less risky than Golden Pursuit. It trades about 0.08 of its potential returns per unit of risk. Golden Pursuit Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 19.00 in Golden Pursuit Resources on October 23, 2024 and sell it today you would lose (5.00) from holding Golden Pursuit Resources or give up 26.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canso Credit Trust vs. Golden Pursuit Resources
Performance |
| Timeline |
| Canso Credit Trust |
| Golden Pursuit Resources |
Canso Credit and Golden Pursuit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canso Credit and Golden Pursuit
The main advantage of trading using opposite Canso Credit and Golden Pursuit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canso Credit position performs unexpectedly, Golden Pursuit 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 Golden Pursuit will offset losses from the drop in Golden Pursuit's long position.| Canso Credit vs. MINT Income Fund | Canso Credit vs. Canadian High Income | Canso Credit vs. Blue Ribbon Income | Canso Credit vs. Australian REIT Income |
| Golden Pursuit vs. Financial 15 Split | Golden Pursuit vs. Fairfax Financial Holdings | Golden Pursuit vs. Canso Credit Trust | Golden Pursuit vs. Manulife Financial Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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