Correlation Between Tucows and Imperial Oil
Can any of the company-specific risk be diversified away by investing in both Tucows and Imperial Oil 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 Tucows and Imperial Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tucows Inc and Imperial Oil, you can compare the effects of market volatilities on Tucows and Imperial Oil 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 Tucows with a short position of Imperial Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tucows and Imperial Oil.
Diversification Opportunities for Tucows and Imperial Oil
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tucows and Imperial is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tucows Inc and Imperial Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Oil and Tucows 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 Tucows Inc are associated (or correlated) with Imperial Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Oil has no effect on the direction of Tucows i.e., Tucows and Imperial Oil go up and down completely randomly.
Pair Corralation between Tucows and Imperial Oil
Assuming the 90 days horizon Tucows is expected to generate 2.54 times less return on investment than Imperial Oil. In addition to that, Tucows is 2.24 times more volatile than Imperial Oil. It trades about 0.03 of its total potential returns per unit of risk. Imperial Oil is currently generating about 0.18 per unit of volatility. If you would invest 9,850 in Imperial Oil on September 4, 2024 and sell it today you would earn a total of 509.00 from holding Imperial Oil or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tucows Inc vs. Imperial Oil
Performance |
| Timeline |
| Tucows Inc |
| Imperial Oil |
Tucows and Imperial Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tucows and Imperial Oil
The main advantage of trading using opposite Tucows and Imperial Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tucows position performs unexpectedly, Imperial Oil 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 Imperial Oil will offset losses from the drop in Imperial Oil's long position.| Tucows vs. TECSYS Inc | Tucows vs. Descartes Systems Group | Tucows vs. Enghouse Systems | Tucows vs. Evertz Technologies Limited |
| Imperial Oil vs. Canadian Natural Resources | Imperial Oil vs. Cenovus Energy | Imperial Oil vs. TC Energy Corp | Imperial Oil vs. Suncor Energy |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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