Correlation Between Canaf Investments and Primaris Retail

Can any of the company-specific risk be diversified away by investing in both Canaf Investments and Primaris Retail 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 Canaf Investments and Primaris Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canaf Investments and Primaris Retail RE, you can compare the effects of market volatilities on Canaf Investments and Primaris Retail 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 Canaf Investments with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and Primaris Retail.

Diversification Opportunities for Canaf Investments and Primaris Retail

-0.61

Correlation Coefficient

Canaf Investments  Primaris Retail

Excellent diversification

The 3 months correlation between Canaf and Primaris is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and Canaf Investments 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 Canaf Investments are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of Canaf Investments i.e., Canaf Investments and Primaris Retail go up and down completely randomly.

Pair Corralation between Canaf Investments and Primaris Retail

Assuming the 90 days horizon Canaf Investments is expected to generate 3.34 times more return on investment than Primaris Retail. However, Canaf Investments is 3.34 times more volatile than Primaris Retail RE. It trades about 0.06 of its potential returns per unit of risk. Primaris Retail RE is currently generating about -0.04 per unit of risk. If you would invest  29.00  in Canaf Investments on December 30, 2024 and sell it today you would earn a total of  3.00  from holding Canaf Investments or generate 10.34% return on investment over 90 days.

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

Canaf Investments  vs.  Primaris Retail RE

Canaf Investments

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canaf Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Canaf Investments showed solid returns over the last few months and may actually be approaching a breakup point.

Primaris Retail RE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canaf Investments and Primaris Retail

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

The idea behind Canaf Investments and Primaris Retail RE 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.