Correlation Between Premium Income and Canuc Resources
Can any of the company-specific risk be diversified away by investing in both Premium Income and Canuc Resources 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 Premium Income and Canuc Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and Canuc Resources Corp, you can compare the effects of market volatilities on Premium Income and Canuc Resources 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 Premium Income with a short position of Canuc Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Canuc Resources.
Diversification Opportunities for Premium Income and Canuc Resources
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premium and Canuc is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and Canuc Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canuc Resources Corp and Premium Income 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 Premium Income are associated (or correlated) with Canuc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canuc Resources Corp has no effect on the direction of Premium Income i.e., Premium Income and Canuc Resources go up and down completely randomly.
Pair Corralation between Premium Income and Canuc Resources
Assuming the 90 days trading horizon Premium Income is expected to under-perform the Canuc Resources. But the stock apears to be less risky and, when comparing its historical volatility, Premium Income is 2.1 times less risky than Canuc Resources. The stock trades about -0.15 of its potential returns per unit of risk. The Canuc Resources Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Canuc Resources Corp on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Canuc Resources Corp or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. Canuc Resources Corp
Performance |
| Timeline |
| Premium Income |
| Canuc Resources Corp |
Premium Income and Canuc Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and Canuc Resources
The main advantage of trading using opposite Premium Income and Canuc Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income position performs unexpectedly, Canuc Resources 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 Canuc Resources will offset losses from the drop in Canuc Resources' long position.| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
| Canuc Resources vs. iSign Media Solutions | Canuc Resources vs. Mako Mining Corp | Canuc Resources vs. Nicola Mining | Canuc Resources vs. Storage Vault 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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