Correlation Between Western Investment and Scandium Canada
Can any of the company-specific risk be diversified away by investing in both Western Investment and Scandium Canada 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 Western Investment and Scandium Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Investment and Scandium Canada, you can compare the effects of market volatilities on Western Investment and Scandium Canada 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 Western Investment with a short position of Scandium Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Investment and Scandium Canada.
Diversification Opportunities for Western Investment and Scandium Canada
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Scandium is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Western Investment and Scandium Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandium Canada and Western Investment 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 Western Investment are associated (or correlated) with Scandium Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandium Canada has no effect on the direction of Western Investment i.e., Western Investment and Scandium Canada go up and down completely randomly.
Pair Corralation between Western Investment and Scandium Canada
Given the investment horizon of 90 days Western Investment is expected to generate 0.23 times more return on investment than Scandium Canada. However, Western Investment is 4.34 times less risky than Scandium Canada. It trades about 0.15 of its potential returns per unit of risk. Scandium Canada is currently generating about 0.02 per unit of risk. If you would invest 42.00 in Western Investment on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Western Investment or generate 11.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Investment vs. Scandium Canada
Performance |
| Timeline |
| Western Investment |
| Scandium Canada |
Western Investment and Scandium Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Investment and Scandium Canada
The main advantage of trading using opposite Western Investment and Scandium Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Investment position performs unexpectedly, Scandium Canada 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 Scandium Canada will offset losses from the drop in Scandium Canada's long position.| Western Investment vs. Colliers International Group | Western Investment vs. Altus Group Limited | Western Investment vs. Harvest Global REIT | Western Investment vs. International Zeolite Corp |
| Scandium Canada vs. Brookfield Investments | Scandium Canada vs. Verizon Communications CDR | Scandium Canada vs. Western Investment | Scandium Canada vs. Talon Metals Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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