Correlation Between TC Energy and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both TC Energy 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 TC Energy and Canaf Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TC Energy Corp and Canaf Investments, you can compare the effects of market volatilities on TC Energy 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 TC Energy with a short position of Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and Canaf Investments.
Diversification Opportunities for TC Energy and Canaf Investments
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TRP-PC and Canaf is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments and TC Energy 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 TC Energy Corp 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 TC Energy i.e., TC Energy and Canaf Investments go up and down completely randomly.
Pair Corralation between TC Energy and Canaf Investments
Assuming the 90 days trading horizon TC Energy is expected to generate 5.39 times less return on investment than Canaf Investments. But when comparing it to its historical volatility, TC Energy Corp is 4.15 times less risky than Canaf Investments. It trades about 0.16 of its potential returns per unit of risk. Canaf Investments is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Canaf Investments on November 5, 2024 and sell it today you would earn a total of 5.00 from holding Canaf Investments or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TC Energy Corp vs. Canaf Investments
Performance |
| Timeline |
| TC Energy Corp |
| Canaf Investments |
TC Energy and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and Canaf Investments
The main advantage of trading using opposite TC Energy and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy 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.| TC Energy vs. Quipt Home Medical | TC Energy vs. Ramp Metals | TC Energy vs. Nicola Mining | TC Energy vs. Western Copper and |
| Canaf Investments vs. Richelieu Hardware | Canaf Investments vs. T2 Metals Corp | Canaf Investments vs. Datable Technology Corp | Canaf Investments vs. Ramp Metals |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Commodity Directory Find actively traded commodities issued by global exchanges |