Correlation Between USD Partners and Canadian National
Can any of the company-specific risk be diversified away by investing in both USD Partners and Canadian National 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 USD Partners and Canadian National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USD Partners LP and Canadian National Railway, you can compare the effects of market volatilities on USD Partners and Canadian National 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 USD Partners with a short position of Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of USD Partners and Canadian National.
Diversification Opportunities for USD Partners and Canadian National
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USD and Canadian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding USD Partners LP and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway and USD Partners 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 USD Partners LP are associated (or correlated) with Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of USD Partners i.e., USD Partners and Canadian National go up and down completely randomly.
Pair Corralation between USD Partners and Canadian National
If you would invest 10,792 in Canadian National Railway on September 1, 2024 and sell it today you would earn a total of 377.00 from holding Canadian National Railway or generate 3.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
USD Partners LP vs. Canadian National Railway
Performance |
| Timeline |
| USD Partners LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Canadian National Railway |
USD Partners and Canadian National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USD Partners and Canadian National
The main advantage of trading using opposite USD Partners and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USD Partners position performs unexpectedly, Canadian National 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 Canadian National will offset losses from the drop in Canadian National's long position.| USD Partners vs. Greenbrier Companies | USD Partners vs. LB Foster | USD Partners vs. Freightcar America | USD Partners vs. Westinghouse Air Brake |
| Canadian National vs. Union Pacific | Canadian National vs. CSX Corporation | Canadian National vs. Norfolk Southern | Canadian National vs. Westinghouse Air Brake |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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