Correlation Between Burcon NutraScience and Consumer Staples

Can any of the company-specific risk be diversified away by investing in both Burcon NutraScience and Consumer Staples 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 Burcon NutraScience and Consumer Staples into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Burcon NutraScience Corp and Consumer Staples Portfolio, you can compare the effects of market volatilities on Burcon NutraScience and Consumer Staples 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 Burcon NutraScience with a short position of Consumer Staples. Check out your portfolio center. Please also check ongoing floating volatility patterns of Burcon NutraScience and Consumer Staples.

Diversification Opportunities for Burcon NutraScience and Consumer Staples

0.0

Correlation Coefficient

Burcon NutraScience  Consumer Staples

Pay attention - limited upside

The 3 months correlation between Burcon and Consumer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Burcon NutraScience Corp and Consumer Staples Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Staples Por and Burcon NutraScience 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 Burcon NutraScience Corp are associated (or correlated) with Consumer Staples. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Staples Por has no effect on the direction of Burcon NutraScience i.e., Burcon NutraScience and Consumer Staples go up and down completely randomly.

Pair Corralation between Burcon NutraScience and Consumer Staples

If you would invest  8,680  in Consumer Staples Portfolio on December 30, 2024 and sell it today you would lose (16.00) from holding Consumer Staples Portfolio or give up 0.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Burcon NutraScience Corp  vs.  Consumer Staples Portfolio

Burcon NutraScience Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Burcon NutraScience Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Burcon NutraScience is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Consumer Staples Por

Risk-Adjusted Performance

Very Weak

Over the last 90 days Consumer Staples Portfolio has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Consumer Staples is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Burcon NutraScience and Consumer Staples

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

The idea behind Burcon NutraScience Corp and Consumer Staples Portfolio 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .