Correlation Between PJX Resources and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both PJX Resources and Canaf Investments 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 PJX Resources and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PJX Resources and Canaf Investments, you can compare the effects of market volatilities on PJX Resources and Canaf Investments 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 PJX Resources with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of PJX Resources and Canaf Investments.
Diversification Opportunities for PJX Resources and Canaf Investments
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PJX and Canaf is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PJX Resources and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and PJX Resources 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 PJX Resources are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of PJX Resources i.e., PJX Resources and Canaf Investments go up and down completely randomly.
Pair Corralation between PJX Resources and Canaf Investments
Assuming the 90 days horizon PJX Resources is expected to under-perform the Canaf Investments. In addition to that, PJX Resources is 1.53 times more volatile than Canaf Investments. It trades about -0.14 of its total potential returns per unit of risk. Canaf Investments is currently generating about 0.11 per unit of volatility. If you would invest 25.00 in Canaf Investments on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Canaf Investments or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PJX Resources vs. Canaf Investments
Performance |
| Timeline |
| PJX Resources |
| Canaf Investments |
PJX Resources and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PJX Resources and Canaf Investments
The main advantage of trading using opposite PJX Resources and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJX Resources position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| PJX Resources vs. First Majestic Silver | PJX Resources vs. Ivanhoe Energy | PJX Resources vs. Orezone Gold Corp | PJX Resources vs. Faraday Copper Corp |
| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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