Correlation Between Canadian General and Smarttech247 Group

Can any of the company-specific risk be diversified away by investing in both Canadian General and Smarttech247 Group 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 Canadian General and Smarttech247 Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canadian General Investments and Smarttech247 Group PLC, you can compare the effects of market volatilities on Canadian General and Smarttech247 Group 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 Canadian General with a short position of Smarttech247 Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Smarttech247 Group.

Diversification Opportunities for Canadian General and Smarttech247 Group

0.61

Correlation Coefficient

Canadian General  Smarttech247 Group

Poor diversification

The 3 months correlation between Canadian and Smarttech247 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Smarttech247 Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smarttech247 Group PLC and Canadian General 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 Canadian General Investments are associated (or correlated) with Smarttech247 Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smarttech247 Group PLC has no effect on the direction of Canadian General i.e., Canadian General and Smarttech247 Group go up and down completely randomly.

Pair Corralation between Canadian General and Smarttech247 Group

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.44 times more return on investment than Smarttech247 Group. However, Canadian General Investments is 2.29 times less risky than Smarttech247 Group. It trades about -0.09 of its potential returns per unit of risk. Smarttech247 Group PLC is currently generating about -0.11 per unit of risk. If you would invest  224,496  in Canadian General Investments on December 26, 2024 and sell it today you would lose (23,496) from holding Canadian General Investments or give up 10.47% of portfolio value over 90 days.

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

Canadian General Investments  vs.  Smarttech247 Group PLC

Canadian General Inv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian General Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Smarttech247 Group PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smarttech247 Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Canadian General and Smarttech247 Group

The main advantage of trading using opposite Canadian General and Smarttech247 Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian General position performs unexpectedly, Smarttech247 Group 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 Smarttech247 Group will offset losses from the drop in Smarttech247 Group's long position.

The idea behind Canadian General Investments and Smarttech247 Group PLC 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.