Correlation Between COSTAR GROUP and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both COSTAR GROUP and Canadian Utilities 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 COSTAR GROUP and Canadian Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COSTAR GROUP INC and Canadian Utilities Limited, you can compare the effects of market volatilities on COSTAR GROUP and Canadian Utilities 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 COSTAR GROUP with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSTAR GROUP and Canadian Utilities.
Diversification Opportunities for COSTAR GROUP and Canadian Utilities
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between COSTAR and Canadian is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding COSTAR GROUP INC and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and COSTAR GROUP 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 COSTAR GROUP INC are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of COSTAR GROUP i.e., COSTAR GROUP and Canadian Utilities go up and down completely randomly.
Pair Corralation between COSTAR GROUP and Canadian Utilities
Assuming the 90 days horizon COSTAR GROUP is expected to generate 1.97 times less return on investment than Canadian Utilities. In addition to that, COSTAR GROUP is 1.67 times more volatile than Canadian Utilities Limited. It trades about 0.03 of its total potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.09 per unit of volatility. If you would invest 1,816 in Canadian Utilities Limited on August 26, 2024 and sell it today you would earn a total of 611.00 from holding Canadian Utilities Limited or generate 33.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COSTAR GROUP INC vs. Canadian Utilities Limited
Performance |
| Timeline |
| COSTAR GROUP INC |
| Canadian Utilities |
COSTAR GROUP and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COSTAR GROUP and Canadian Utilities
The main advantage of trading using opposite COSTAR GROUP and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSTAR GROUP position performs unexpectedly, Canadian Utilities 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 Utilities will offset losses from the drop in Canadian Utilities' long position.| COSTAR GROUP vs. Canadian Utilities Limited | COSTAR GROUP vs. GALENA MINING LTD | COSTAR GROUP vs. GRIFFIN MINING LTD | COSTAR GROUP vs. UET United Electronic |
| Canadian Utilities vs. Sempra | Canadian Utilities vs. Superior Plus Corp | Canadian Utilities vs. NMI Holdings | Canadian Utilities vs. Origin Agritech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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