Correlation Between Wizz Air and Canadian General
Can any of the company-specific risk be diversified away by investing in both Wizz Air and Canadian General 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 Wizz Air and Canadian General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Canadian General Investments, you can compare the effects of market volatilities on Wizz Air and Canadian General 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 Wizz Air with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Canadian General.
Diversification Opportunities for Wizz Air and Canadian General
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wizz and Canadian is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Wizz Air 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 Wizz Air Holdings are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Wizz Air i.e., Wizz Air and Canadian General go up and down completely randomly.
Pair Corralation between Wizz Air and Canadian General
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Canadian General. In addition to that, Wizz Air is 1.45 times more volatile than Canadian General Investments. It trades about -0.06 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.06 per unit of volatility. If you would invest 226,000 in Canadian General Investments on November 1, 2024 and sell it today you would earn a total of 5,000 from holding Canadian General Investments or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Canadian General Investments
Performance |
| Timeline |
| Wizz Air Holdings |
| Canadian General Inv |
Wizz Air and Canadian General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Canadian General
The main advantage of trading using opposite Wizz Air and Canadian General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air position performs unexpectedly, Canadian General 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 General will offset losses from the drop in Canadian General's long position.| Wizz Air vs. Arrow Electronics | Wizz Air vs. Ecofin Global Utilities | Wizz Air vs. Monster Beverage Corp | Wizz Air vs. Take Two Interactive Software |
| Canadian General vs. Costco Wholesale Corp | Canadian General vs. Indutrade AB | Canadian General vs. Ondine Biomedical | Canadian General vs. National Beverage 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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