Correlation Between Ramp Metals and Canadian Life
Can any of the company-specific risk be diversified away by investing in both Ramp Metals and Canadian Life 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 Ramp Metals and Canadian Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ramp Metals and Canadian Life Companies, you can compare the effects of market volatilities on Ramp Metals and Canadian Life 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 Ramp Metals with a short position of Canadian Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramp Metals and Canadian Life.
Diversification Opportunities for Ramp Metals and Canadian Life
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ramp and Canadian is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ramp Metals and Canadian Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Life Companies and Ramp Metals 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 Ramp Metals are associated (or correlated) with Canadian Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Life Companies has no effect on the direction of Ramp Metals i.e., Ramp Metals and Canadian Life go up and down completely randomly.
Pair Corralation between Ramp Metals and Canadian Life
Assuming the 90 days trading horizon Ramp Metals is expected to generate 47.87 times more return on investment than Canadian Life. However, Ramp Metals is 47.87 times more volatile than Canadian Life Companies. It trades about 0.09 of its potential returns per unit of risk. Canadian Life Companies is currently generating about 0.1 per unit of risk. If you would invest 19.00 in Ramp Metals on November 5, 2024 and sell it today you would earn a total of 86.00 from holding Ramp Metals or generate 452.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 44.04% |
| Values | Daily Returns |
Ramp Metals vs. Canadian Life Companies
Performance |
| Timeline |
| Ramp Metals |
| Canadian Life Companies |
Ramp Metals and Canadian Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ramp Metals and Canadian Life
The main advantage of trading using opposite Ramp Metals and Canadian Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ramp Metals position performs unexpectedly, Canadian Life 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 Life will offset losses from the drop in Canadian Life's long position.| Ramp Metals vs. Doman Building Materials | Ramp Metals vs. Leading Edge Materials | Ramp Metals vs. Pollard Banknote Limited | Ramp Metals vs. Laurentian Bank |
| Canadian Life vs. Brookfield | Canadian Life vs. Brookfield Asset Management | Canadian Life vs. Sprott Physical Gold | Canadian Life vs. IGM Financial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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