Correlation Between Commerce Energy and Canadian Utilities

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

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

Diversification Opportunities for Commerce Energy and Canadian Utilities

0.0

Correlation Coefficient

Commerce Energy  Canadian Utilities

Pay attention - limited upside

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

Pair Corralation between Commerce Energy and Canadian Utilities

If you would invest  2,380  in Canadian Utilities Limited on December 30, 2024 and sell it today you would earn a total of  164.00  from holding Canadian Utilities Limited or generate 6.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Commerce Energy Group  vs.  Canadian Utilities Limited

Commerce Energy Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Commerce Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Commerce Energy is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Canadian Utilities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Utilities Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Canadian Utilities may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Commerce Energy and Canadian Utilities

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

The idea behind Commerce Energy Group and Canadian Utilities Limited 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.

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 Transaction History module to view history of all your transactions and understand their impact on performance.