Correlation Between BBB Foods and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both BBB Foods and Canlan Ice 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 BBB Foods and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BBB Foods and Canlan Ice Sports, you can compare the effects of market volatilities on BBB Foods and Canlan Ice 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 BBB Foods with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBB Foods and Canlan Ice.
Diversification Opportunities for BBB Foods and Canlan Ice
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BBB and Canlan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding BBB Foods and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and BBB Foods 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 BBB Foods are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of BBB Foods i.e., BBB Foods and Canlan Ice go up and down completely randomly.
Pair Corralation between BBB Foods and Canlan Ice
Given the investment horizon of 90 days BBB Foods is expected to under-perform the Canlan Ice. In addition to that, BBB Foods is 17.93 times more volatile than Canlan Ice Sports. It trades about -0.02 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.18 per unit of volatility. If you would invest 292.00 in Canlan Ice Sports on August 29, 2024 and sell it today you would earn a total of 5.00 from holding Canlan Ice Sports or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
BBB Foods vs. Canlan Ice Sports
Performance |
| Timeline |
| BBB Foods |
| Canlan Ice Sports |
BBB Foods and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BBB Foods and Canlan Ice
The main advantage of trading using opposite BBB Foods and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BBB Foods position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| BBB Foods vs. BJs Wholesale Club | BBB Foods vs. Dollar General | BBB Foods vs. Dollar Tree | BBB Foods vs. Target |
| Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. ANTA Sports Products | Canlan Ice vs. Carnival Plc ADS | Canlan Ice vs. BANDAI NAMCO Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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