Correlation Between Solution Financial and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Solution Financial and Canaf Investments 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 Solution Financial and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solution Financial and Canaf Investments, you can compare the effects of market volatilities on Solution Financial and Canaf Investments 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 Solution Financial with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solution Financial and Canaf Investments.
Diversification Opportunities for Solution Financial and Canaf Investments
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Solution and Canaf is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Solution Financial and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and Solution Financial 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 Solution Financial are associated (or correlated) with Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Solution Financial i.e., Solution Financial and Canaf Investments go up and down completely randomly.
Pair Corralation between Solution Financial and Canaf Investments
Assuming the 90 days trading horizon Solution Financial is expected to generate 0.56 times more return on investment than Canaf Investments. However, Solution Financial is 1.79 times less risky than Canaf Investments. It trades about 0.01 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.07 per unit of risk. If you would invest 28.00 in Solution Financial on December 11, 2024 and sell it today you would earn a total of 0.00 from holding Solution Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solution Financial vs. Canaf Investments
Performance |
| Timeline |
| Solution Financial |
| Canaf Investments |
Solution Financial and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solution Financial and Canaf Investments
The main advantage of trading using opposite Solution Financial and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solution Financial position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Solution Financial vs. South Pacific Metals | Solution Financial vs. Metalero Mining Corp | Solution Financial vs. Mako Mining Corp | Solution Financial vs. Eskay Mining Corp |
| Canaf Investments vs. Thunderbird Entertainment Group | Canaf Investments vs. Adex Mining | Canaf Investments vs. Andean Precious Metals | Canaf Investments vs. Endeavour Silver Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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