Correlation Between Winpak and Altus Group
Can any of the company-specific risk be diversified away by investing in both Winpak and Altus Group 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 Winpak and Altus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winpak and Altus Group Limited, you can compare the effects of market volatilities on Winpak and Altus Group 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 Winpak with a short position of Altus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winpak and Altus Group.
Diversification Opportunities for Winpak and Altus Group
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Winpak and Altus is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Winpak and Altus Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Group Limited and Winpak 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 Winpak are associated (or correlated) with Altus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Group Limited has no effect on the direction of Winpak i.e., Winpak and Altus Group go up and down completely randomly.
Pair Corralation between Winpak and Altus Group
Assuming the 90 days trading horizon Winpak is expected to under-perform the Altus Group. But the stock apears to be less risky and, when comparing its historical volatility, Winpak is 1.72 times less risky than Altus Group. The stock trades about -0.3 of its potential returns per unit of risk. The Altus Group Limited is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 5,558 in Altus Group Limited on November 2, 2024 and sell it today you would earn a total of 360.00 from holding Altus Group Limited or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winpak vs. Altus Group Limited
Performance |
| Timeline |
| Winpak |
| Altus Group Limited |
Winpak and Altus Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winpak and Altus Group
The main advantage of trading using opposite Winpak and Altus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winpak position performs unexpectedly, Altus Group 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 Altus Group will offset losses from the drop in Altus Group's long position.| Winpak vs. Arizona Metals Corp | Winpak vs. Profound Medical Corp | Winpak vs. Oncolytics Biotech | Winpak vs. Altair Resources |
| Altus Group vs. Colliers International Group | Altus Group vs. FirstService Corp | Altus Group vs. Winpak | Altus Group vs. Ritchie Bros Auctioneers |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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