Correlation Between BeMetals Corp and Canso Credit

Can any of the company-specific risk be diversified away by investing in both BeMetals Corp and Canso Credit 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 BeMetals Corp and Canso Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BeMetals Corp and Canso Credit Trust, you can compare the effects of market volatilities on BeMetals Corp and Canso Credit 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 BeMetals Corp with a short position of Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of BeMetals Corp and Canso Credit.

Diversification Opportunities for BeMetals Corp and Canso Credit

-0.91

Correlation Coefficient

BeMetals Corp  Canso Credit

Pay attention - limited upside

The 3 months correlation between BeMetals and Canso is -0.91. Overlapping area represents the amount of risk that can be diversified away by holding BeMetals Corp and Canso Credit Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canso Credit Trust and BeMetals Corp 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 BeMetals Corp are associated (or correlated) with Canso Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canso Credit Trust has no effect on the direction of BeMetals Corp i.e., BeMetals Corp and Canso Credit go up and down completely randomly.

Pair Corralation between BeMetals Corp and Canso Credit

Assuming the 90 days trading horizon BeMetals Corp is expected to generate 14.59 times less return on investment than Canso Credit. In addition to that, BeMetals Corp is 12.27 times more volatile than Canso Credit Trust. It trades about 0.0 of its total potential returns per unit of risk. Canso Credit Trust is currently generating about 0.08 per unit of volatility. If you would invest  1,320  in Canso Credit Trust on October 4, 2024 and sell it today you would earn a total of  275.00  from holding Canso Credit Trust or generate 20.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

BeMetals Corp  vs.  Canso Credit Trust

BeMetals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BeMetals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Canso Credit Trust

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canso Credit Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Canso Credit is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BeMetals Corp and Canso Credit

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

The idea behind BeMetals Corp and Canso Credit Trust 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.

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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.