Correlation Between Edgepoint Cdn and Symphony Floating

Can any of the company-specific risk be diversified away by investing in both Edgepoint Cdn and Symphony Floating 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 Edgepoint Cdn and Symphony Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Edgepoint Cdn Growth and Symphony Floating Rate, you can compare the effects of market volatilities on Edgepoint Cdn and Symphony Floating 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 Edgepoint Cdn with a short position of Symphony Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edgepoint Cdn and Symphony Floating.

Diversification Opportunities for Edgepoint Cdn and Symphony Floating

0.84

Correlation Coefficient

Edgepoint Cdn  Symphony Floating

Very poor diversification

The 3 months correlation between Edgepoint and Symphony is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Cdn Growth and Symphony Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Floating Rate and Edgepoint Cdn 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 Edgepoint Cdn Growth are associated (or correlated) with Symphony Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Floating Rate has no effect on the direction of Edgepoint Cdn i.e., Edgepoint Cdn and Symphony Floating go up and down completely randomly.

Pair Corralation between Edgepoint Cdn and Symphony Floating

Assuming the 90 days trading horizon Edgepoint Cdn Growth is expected to generate 0.76 times more return on investment than Symphony Floating. However, Edgepoint Cdn Growth is 1.31 times less risky than Symphony Floating. It trades about 0.11 of its potential returns per unit of risk. Symphony Floating Rate is currently generating about -0.02 per unit of risk. If you would invest  3,033  in Edgepoint Cdn Growth on September 21, 2024 and sell it today you would earn a total of  82.00  from holding Edgepoint Cdn Growth or generate 2.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	96.88%
Values	Daily Returns

Edgepoint Cdn Growth  vs.  Symphony Floating Rate

Edgepoint Cdn Growth

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Edgepoint Cdn is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Symphony Floating Rate

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Symphony Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong technical and fundamental indicators, Symphony Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Edgepoint Cdn and Symphony Floating

The main advantage of trading using opposite Edgepoint Cdn and Symphony Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edgepoint Cdn position performs unexpectedly, Symphony Floating 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 Symphony Floating will offset losses from the drop in Symphony Floating's long position.

The idea behind Edgepoint Cdn Growth and Symphony Floating Rate pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.