Correlation Between Prime Dividend and Canadian General
Can any of the company-specific risk be diversified away by investing in both Prime Dividend and Canadian General 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 Prime Dividend and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Dividend Corp and Canadian General Investments, you can compare the effects of market volatilities on Prime Dividend and Canadian General 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 Prime Dividend with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Dividend and Canadian General.
Diversification Opportunities for Prime Dividend and Canadian General
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Prime and Canadian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Prime Dividend Corp and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Prime Dividend 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 Prime Dividend Corp are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Prime Dividend i.e., Prime Dividend and Canadian General go up and down completely randomly.
Pair Corralation between Prime Dividend and Canadian General
Assuming the 90 days trading horizon Prime Dividend Corp is expected to generate 1.0 times more return on investment than Canadian General. However, Prime Dividend Corp is 1.0 times less risky than Canadian General. It trades about 0.46 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.03 per unit of risk. If you would invest 805.00 in Prime Dividend Corp on September 13, 2024 and sell it today you would earn a total of 74.00 from holding Prime Dividend Corp or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Dividend Corp vs. Canadian General Investments
Performance |
| Timeline |
| Prime Dividend Corp |
| Canadian General Inv |
Prime Dividend and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Dividend and Canadian General
The main advantage of trading using opposite Prime Dividend and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Dividend position performs unexpectedly, Canadian General 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 Canadian General will offset losses from the drop in Canadian General's long position.| Prime Dividend vs. Berkshire Hathaway CDR | Prime Dividend vs. E L Financial Corp | Prime Dividend vs. E L Financial 3 | Prime Dividend vs. Molson Coors Canada |
| Canadian General vs. Berkshire Hathaway CDR | Canadian General vs. E L Financial Corp | Canadian General vs. E L Financial 3 | Canadian General vs. Molson Coors Canada |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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