Correlation Between Restaurant Brands and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Restaurant Brands and Canlan Ice 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 Restaurant Brands and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Restaurant Brands International and Canlan Ice Sports, you can compare the effects of market volatilities on Restaurant Brands and Canlan Ice 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 Restaurant Brands with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Restaurant Brands and Canlan Ice.
Diversification Opportunities for Restaurant Brands and Canlan Ice
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Restaurant and Canlan is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Restaurant Brands Internationa and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Restaurant Brands 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 Restaurant Brands International are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Restaurant Brands i.e., Restaurant Brands and Canlan Ice go up and down completely randomly.
Pair Corralation between Restaurant Brands and Canlan Ice
Assuming the 90 days trading horizon Restaurant Brands International is expected to under-perform the Canlan Ice. But the stock apears to be less risky and, when comparing its historical volatility, Restaurant Brands International is 1.38 times less risky than Canlan Ice. The stock trades about -0.01 of its potential returns per unit of risk. The Canlan Ice Sports is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 401.00 in Canlan Ice Sports on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Canlan Ice Sports or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Restaurant Brands Internationa vs. Canlan Ice Sports
Performance |
| Timeline |
| Restaurant Brands |
| Canlan Ice Sports |
Restaurant Brands and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Restaurant Brands and Canlan Ice
The main advantage of trading using opposite Restaurant Brands and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Restaurant Brands position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Restaurant Brands vs. Canadian Tire | Restaurant Brands vs. Dollarama | Restaurant Brands vs. Nutrien | Restaurant Brands vs. Magna International |
| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |