Correlation Between Buhler Industries and Canso Credit
Can any of the company-specific risk be diversified away by investing in both Buhler Industries 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 Buhler Industries and Canso Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Buhler Industries and Canso Credit Trust, you can compare the effects of market volatilities on Buhler Industries 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 Buhler Industries with a short position of Canso Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Buhler Industries and Canso Credit.
Diversification Opportunities for Buhler Industries and Canso Credit
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Buhler and Canso is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Buhler Industries 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 Buhler Industries 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 Buhler Industries 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 Buhler Industries i.e., Buhler Industries and Canso Credit go up and down completely randomly.
Pair Corralation between Buhler Industries and Canso Credit
Assuming the 90 days trading horizon Buhler Industries is expected to generate 6.79 times more return on investment than Canso Credit. However, Buhler Industries is 6.79 times more volatile than Canso Credit Trust. It trades about 0.12 of its potential returns per unit of risk. Canso Credit Trust is currently generating about 0.19 per unit of risk. If you would invest 240.00 in Buhler Industries on September 26, 2024 and sell it today you would earn a total of 48.00 from holding Buhler Industries or generate 20.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Buhler Industries vs. Canso Credit Trust
Performance |
Timeline |
Buhler Industries |
Canso Credit Trust |
Buhler Industries and Canso Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Buhler Industries and Canso Credit
The main advantage of trading using opposite Buhler Industries and Canso Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Buhler Industries 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.Buhler Industries vs. Exchange Income | Buhler Industries vs. Stella Jones | Buhler Industries vs. Superior Plus Corp | Buhler Industries vs. NFI Group |
Canso Credit vs. Orca Energy Group | Canso Credit vs. Rogers Communications | Canso Credit vs. Aclara Resources | Canso Credit vs. Buhler Industries |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |