Correlation Between Canlan Ice and BranchOut Food

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

By analyzing existing cross correlation between Canlan Ice Sports and BranchOut Food Common, you can compare the effects of market volatilities on Canlan Ice and BranchOut Food 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 Canlan Ice with a short position of BranchOut Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and BranchOut Food.

Diversification Opportunities for Canlan Ice and BranchOut Food

-0.47

Correlation Coefficient

Canlan Ice  BranchOut Food

Very good diversification

The 3 months correlation between Canlan and BranchOut is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and BranchOut Food Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BranchOut Food Common and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with BranchOut Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BranchOut Food Common has no effect on the direction of Canlan Ice i.e., Canlan Ice and BranchOut Food go up and down completely randomly.

Pair Corralation between Canlan Ice and BranchOut Food

Assuming the 90 days horizon Canlan Ice is expected to generate 102.93 times less return on investment than BranchOut Food. But when comparing it to its historical volatility, Canlan Ice Sports is 141.24 times less risky than BranchOut Food. It trades about 0.12 of its potential returns per unit of risk. BranchOut Food Common is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  72.00  in BranchOut Food Common on September 27, 2024 and sell it today you would earn a total of  93.00  from holding BranchOut Food Common or generate 129.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.21%
Values	Daily Returns

Canlan Ice Sports  vs.  BranchOut Food Common

Canlan Ice Sports

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

BranchOut Food Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BranchOut Food Common has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, BranchOut Food is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Canlan Ice and BranchOut Food

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

The idea behind Canlan Ice Sports and BranchOut Food Common 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.