Correlation Between Canadian General and INTEL CDR

Can any of the company-specific risk be diversified away by investing in both Canadian General and INTEL CDR 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 INTEL CDR 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 INTEL CDR, you can compare the effects of market volatilities on Canadian General and INTEL CDR 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 INTEL CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and INTEL CDR.

Diversification Opportunities for Canadian General and INTEL CDR

0.36

Correlation Coefficient

Canadian General  INTEL CDR

Weak diversification

The 3 months correlation between Canadian and INTEL is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and INTEL CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL CDR 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 INTEL CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL CDR has no effect on the direction of Canadian General i.e., Canadian General and INTEL CDR go up and down completely randomly.

Pair Corralation between Canadian General and INTEL CDR

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.35 times more return on investment than INTEL CDR. However, Canadian General Investments is 2.84 times less risky than INTEL CDR. It trades about 0.11 of its potential returns per unit of risk. INTEL CDR is currently generating about 0.01 per unit of risk. If you would invest  3,884  in Canadian General Investments on September 14, 2024 and sell it today you would earn a total of  246.00  from holding Canadian General Investments or generate 6.33% return on investment over 90 days.

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

Canadian General Investments  vs.  INTEL CDR

Canadian General Inv

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian General Investments are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Canadian General may actually be approaching a critical reversion point that can send shares even higher in January 2025.

INTEL CDR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTEL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, INTEL CDR is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Canadian General and INTEL CDR

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

The idea behind Canadian General Investments and INTEL CDR 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.