Correlation Between Telesat Corp and Ascot Resources
Can any of the company-specific risk be diversified away by investing in both Telesat Corp and Ascot Resources 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 Telesat Corp and Ascot Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telesat Corp and Ascot Resources, you can compare the effects of market volatilities on Telesat Corp and Ascot Resources 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 Telesat Corp with a short position of Ascot Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telesat Corp and Ascot Resources.
Diversification Opportunities for Telesat Corp and Ascot Resources
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Telesat and Ascot is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Telesat Corp and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Telesat Corp 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 Telesat Corp are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Telesat Corp i.e., Telesat Corp and Ascot Resources go up and down completely randomly.
Pair Corralation between Telesat Corp and Ascot Resources
Assuming the 90 days trading horizon Telesat Corp is expected to under-perform the Ascot Resources. But the stock apears to be less risky and, when comparing its historical volatility, Telesat Corp is 1.98 times less risky than Ascot Resources. The stock trades about 0.0 of its potential returns per unit of risk. The Ascot Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 16.00 in Ascot Resources on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Ascot Resources or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Telesat Corp vs. Ascot Resources
Performance |
| Timeline |
| Telesat Corp |
| Ascot Resources |
Telesat Corp and Ascot Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telesat Corp and Ascot Resources
The main advantage of trading using opposite Telesat Corp and Ascot Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telesat Corp position performs unexpectedly, Ascot Resources 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 Ascot Resources will offset losses from the drop in Ascot Resources' long position.The idea behind Telesat Corp and Ascot Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ascot Resources vs. First National Financial | Ascot Resources vs. Canso Select Opportunities | Ascot Resources vs. Precision Drilling | Ascot Resources vs. Stampede Drilling |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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