Correlation Between Reitmans and Canada Goose
Can any of the company-specific risk be diversified away by investing in both Reitmans and Canada Goose 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 Reitmans and Canada Goose into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Canada Goose Holdings, you can compare the effects of market volatilities on Reitmans and Canada Goose 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 Reitmans with a short position of Canada Goose. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans and Canada Goose.
Diversification Opportunities for Reitmans and Canada Goose
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Reitmans and Canada is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Canada Goose Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canada Goose Holdings and Reitmans 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 Reitmans Limited are associated (or correlated) with Canada Goose. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canada Goose Holdings has no effect on the direction of Reitmans i.e., Reitmans and Canada Goose go up and down completely randomly.
Pair Corralation between Reitmans and Canada Goose
Assuming the 90 days trading horizon Reitmans Limited is expected to generate 0.99 times more return on investment than Canada Goose. However, Reitmans Limited is 1.01 times less risky than Canada Goose. It trades about 0.03 of its potential returns per unit of risk. Canada Goose Holdings is currently generating about -0.02 per unit of risk. If you would invest 210.00 in Reitmans Limited on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Reitmans Limited or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reitmans Limited vs. Canada Goose Holdings
Performance |
| Timeline |
| Reitmans Limited |
| Canada Goose Holdings |
Reitmans and Canada Goose Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans and Canada Goose
The main advantage of trading using opposite Reitmans and Canada Goose positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans position performs unexpectedly, Canada Goose 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 Canada Goose will offset losses from the drop in Canada Goose's long position.| Reitmans vs. Canada Goose Holdings | Reitmans vs. Spin Master Corp | Reitmans vs. Aritzia | Reitmans vs. iShares Canadian HYBrid |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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