Correlation Between TRAINLINE PLC and Canadian National
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC and Canadian National 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 TRAINLINE PLC and Canadian National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and Canadian National Railway, you can compare the effects of market volatilities on TRAINLINE PLC and Canadian National 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 TRAINLINE PLC with a short position of Canadian National. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Canadian National.
Diversification Opportunities for TRAINLINE PLC and Canadian National
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TRAINLINE and Canadian is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS and Canadian National Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian National Railway and TRAINLINE PLC 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 TRAINLINE PLC LS are associated (or correlated) with Canadian National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian National Railway has no effect on the direction of TRAINLINE PLC i.e., TRAINLINE PLC and Canadian National go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Canadian National
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to generate 1.96 times more return on investment than Canadian National. However, TRAINLINE PLC is 1.96 times more volatile than Canadian National Railway. It trades about 0.19 of its potential returns per unit of risk. Canadian National Railway is currently generating about -0.51 per unit of risk. If you would invest 480.00 in TRAINLINE PLC LS on September 23, 2024 and sell it today you would earn a total of 30.00 from holding TRAINLINE PLC LS or generate 6.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
TRAINLINE PLC LS vs. Canadian National Railway
Performance |
Timeline |
TRAINLINE PLC LS |
Canadian National Railway |
TRAINLINE PLC and Canadian National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TRAINLINE PLC and Canadian National
The main advantage of trading using opposite TRAINLINE PLC and Canadian National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC position performs unexpectedly, Canadian National 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 National will offset losses from the drop in Canadian National's long position.TRAINLINE PLC vs. TRIPCOM GROUP DL 00125 | TRAINLINE PLC vs. TRAVEL LEISURE DL 01 | TRAINLINE PLC vs. TUI AG | TRAINLINE PLC vs. TripAdvisor |
Canadian National vs. Union Pacific | Canadian National vs. CSX Corporation | Canadian National vs. MTR Limited | Canadian National vs. CRRC Limited |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |