Correlation Between Western Union and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Western Union and Canlan Ice 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 Union and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Union Co and Canlan Ice Sports, you can compare the effects of market volatilities on Western Union and Canlan Ice 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 Union with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Union and Canlan Ice.
Diversification Opportunities for Western Union and Canlan Ice
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Canlan is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Western Union Co and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Western Union 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 Union Co are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Western Union i.e., Western Union and Canlan Ice go up and down completely randomly.
Pair Corralation between Western Union and Canlan Ice
If you would invest 1,076 in Western Union Co on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Western Union Co or generate 2.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Union Co vs. Canlan Ice Sports
Performance |
| Timeline |
| Western Union |
| Canlan Ice Sports |
Western Union and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Union and Canlan Ice
The main advantage of trading using opposite Western Union and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Union position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Western Union vs. Navient Corp | Western Union vs. Green Dot | Western Union vs. Orix Corp Ads | Western Union vs. FirstCash |
| Canlan Ice vs. Philip Morris International | Canlan Ice vs. Ambev SA ADR | Canlan Ice vs. Japan Tobacco ADR | Canlan Ice vs. Compania Cervecerias Unidas |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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