Correlation Between Scandium Canada and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Scandium Canada and Canadian Natural 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 Scandium Canada and Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandium Canada and Canadian Natural Resources, you can compare the effects of market volatilities on Scandium Canada and Canadian Natural 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 Scandium Canada with a short position of Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandium Canada and Canadian Natural.
Diversification Opportunities for Scandium Canada and Canadian Natural
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandium and Canadian is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Scandium Canada and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res and Scandium Canada 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 Scandium Canada are associated (or correlated) with Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Scandium Canada i.e., Scandium Canada and Canadian Natural go up and down completely randomly.
Pair Corralation between Scandium Canada and Canadian Natural
Assuming the 90 days horizon Scandium Canada is expected to generate 5.89 times more return on investment than Canadian Natural. However, Scandium Canada is 5.89 times more volatile than Canadian Natural Resources. It trades about 0.01 of its potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.06 per unit of risk. If you would invest 7.50 in Scandium Canada on August 31, 2024 and sell it today you would lose (5.00) from holding Scandium Canada or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Scandium Canada vs. Canadian Natural Resources
Performance |
| Timeline |
| Scandium Canada |
| Canadian Natural Res |
Scandium Canada and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandium Canada and Canadian Natural
The main advantage of trading using opposite Scandium Canada and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandium Canada position performs unexpectedly, Canadian Natural 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 Natural will offset losses from the drop in Canadian Natural's long position.| Scandium Canada vs. Exco Technologies Limited | Scandium Canada vs. Verizon Communications CDR | Scandium Canada vs. SalesforceCom CDR | Scandium Canada vs. Birchtech Corp |
| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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