Correlation Between PATTIES FOODS and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both PATTIES FOODS and Canadian Utilities 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 PATTIES FOODS and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PATTIES FOODS and Canadian Utilities Limited, you can compare the effects of market volatilities on PATTIES FOODS and Canadian Utilities 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 PATTIES FOODS with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of PATTIES FOODS and Canadian Utilities.
Diversification Opportunities for PATTIES FOODS and Canadian Utilities
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between PATTIES and Canadian is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PATTIES FOODS and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and PATTIES FOODS 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 PATTIES FOODS are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of PATTIES FOODS i.e., PATTIES FOODS and Canadian Utilities go up and down completely randomly.
Pair Corralation between PATTIES FOODS and Canadian Utilities
Assuming the 90 days horizon PATTIES FOODS is expected to generate 2.82 times more return on investment than Canadian Utilities. However, PATTIES FOODS is 2.82 times more volatile than Canadian Utilities Limited. It trades about -0.06 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about -0.23 per unit of risk. If you would invest 29.00 in PATTIES FOODS on November 7, 2024 and sell it today you would lose (1.00) from holding PATTIES FOODS or give up 3.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PATTIES FOODS vs. Canadian Utilities Limited
Performance |
| Timeline |
| PATTIES FOODS |
| Canadian Utilities |
PATTIES FOODS and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PATTIES FOODS and Canadian Utilities
The main advantage of trading using opposite PATTIES FOODS and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PATTIES FOODS position performs unexpectedly, Canadian Utilities 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 Utilities will offset losses from the drop in Canadian Utilities' long position.| PATTIES FOODS vs. Zoom Video Communications | PATTIES FOODS vs. GLG LIFE TECH | PATTIES FOODS vs. Bio Techne Corp | PATTIES FOODS vs. Arrow Electronics |
| Canadian Utilities vs. Kingdee International Software | Canadian Utilities vs. Scottish Mortgage Investment | Canadian Utilities vs. Magic Software Enterprises | Canadian Utilities vs. Guidewire Software |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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