Correlation Between Freightcar America and Canadian National
Can any of the company-specific risk be diversified away by investing in both Freightcar America and Canadian National 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 Freightcar America and Canadian National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freightcar America and Canadian National Railway, you can compare the effects of market volatilities on Freightcar America and Canadian National 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 Freightcar America with a short position of Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freightcar America and Canadian National.
Diversification Opportunities for Freightcar America and Canadian National
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freightcar and Canadian is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Freightcar America and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway and Freightcar America 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 Freightcar America are associated (or correlated) with Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of Freightcar America i.e., Freightcar America and Canadian National go up and down completely randomly.
Pair Corralation between Freightcar America and Canadian National
Given the investment horizon of 90 days Freightcar America is expected to generate 4.47 times more return on investment than Canadian National. However, Freightcar America is 4.47 times more volatile than Canadian National Railway. It trades about 0.14 of its potential returns per unit of risk. Canadian National Railway is currently generating about 0.0 per unit of risk. If you would invest 234.00 in Freightcar America on August 26, 2024 and sell it today you would earn a total of 711.00 from holding Freightcar America or generate 303.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freightcar America vs. Canadian National Railway
Performance |
| Timeline |
| Freightcar America |
| Canadian National Railway |
Freightcar America and Canadian National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freightcar America and Canadian National
The main advantage of trading using opposite Freightcar America and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freightcar America position performs unexpectedly, Canadian National 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 National will offset losses from the drop in Canadian National's long position.| Freightcar America vs. Greenbrier Companies | Freightcar America vs. LB Foster | Freightcar America vs. Westinghouse Air Brake | Freightcar America vs. CSX Corporation |
| Canadian National vs. Union Pacific | Canadian National vs. CSX Corporation | Canadian National vs. Norfolk Southern | Canadian National vs. Westinghouse Air Brake |
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.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |