Correlation Between TC Energy and CCL Industries
Can any of the company-specific risk be diversified away by investing in both TC Energy and CCL Industries 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 CCL Industries 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 CCL Industries, you can compare the effects of market volatilities on TC Energy and CCL Industries 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 CCL Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and CCL Industries.
Diversification Opportunities for TC Energy and CCL Industries
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRP and CCL is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp and CCL Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Industries 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 CCL Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Industries has no effect on the direction of TC Energy i.e., TC Energy and CCL Industries go up and down completely randomly.
Pair Corralation between TC Energy and CCL Industries
Assuming the 90 days trading horizon TC Energy Corp is expected to generate 0.97 times more return on investment than CCL Industries. However, TC Energy Corp is 1.04 times less risky than CCL Industries. It trades about 0.07 of its potential returns per unit of risk. CCL Industries is currently generating about 0.04 per unit of risk. If you would invest 4,313 in TC Energy Corp on September 20, 2024 and sell it today you would earn a total of 2,199 from holding TC Energy Corp or generate 50.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TC Energy Corp vs. CCL Industries
Performance |
| Timeline |
| TC Energy Corp |
| CCL Industries |
TC Energy and CCL Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TC Energy and CCL Industries
The main advantage of trading using opposite TC Energy and CCL Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy position performs unexpectedly, CCL Industries 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 CCL Industries will offset losses from the drop in CCL Industries' long position.| TC Energy vs. Enbridge | TC Energy vs. BCE Inc | TC Energy vs. Fortis Inc | TC Energy vs. Pembina Pipeline Corp |
| CCL Industries vs. CCL Industries | CCL Industries vs. Quebecor | CCL Industries vs. Winpak | CCL Industries vs. Restaurant Brands International |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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