Correlation Between Canadian High and Evolve Canadian

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

By analyzing existing cross correlation between Canadian High Income and Evolve Canadian Aggregate, you can compare the effects of market volatilities on Canadian High and Evolve Canadian 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 High with a short position of Evolve Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian High and Evolve Canadian.

Diversification Opportunities for Canadian High and Evolve Canadian

0.0

Correlation Coefficient

Canadian High  Evolve Canadian

Pay attention - limited upside

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

Pair Corralation between Canadian High and Evolve Canadian

If you would invest  1,896  in Evolve Canadian Aggregate on October 12, 2024 and sell it today you would earn a total of  67.00  from holding Evolve Canadian Aggregate or generate 3.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.67%
Values	Daily Returns

Canadian High Income  vs.  Evolve Canadian Aggregate

Canadian High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canadian High Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Canadian High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Evolve Canadian Aggregate

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evolve Canadian Aggregate are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Evolve Canadian is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Canadian High and Evolve Canadian

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

The idea behind Canadian High Income and Evolve Canadian Aggregate 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..