Correlation Between Canlan Ice and Getty Realty

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

Diversification Opportunities for Canlan Ice and Getty Realty

-0.38

Correlation Coefficient

Canlan Ice  Getty Realty

Very good diversification

The 3 months correlation between Canlan and Getty is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Getty Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Realty 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 Getty Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Realty has no effect on the direction of Canlan Ice i.e., Canlan Ice and Getty Realty go up and down completely randomly.

Pair Corralation between Canlan Ice and Getty Realty

Assuming the 90 days horizon Canlan Ice Sports is expected to generate 0.11 times more return on investment than Getty Realty. However, Canlan Ice Sports is 9.4 times less risky than Getty Realty. It trades about 0.13 of its potential returns per unit of risk. Getty Realty is currently generating about 0.0 per unit of risk. If you would invest  272.00  in Canlan Ice Sports on October 7, 2024 and sell it today you would earn a total of  25.00  from holding Canlan Ice Sports or generate 9.19% return on investment over 90 days.

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

Canlan Ice Sports  vs.  Getty Realty

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Getty Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canlan Ice and Getty Realty

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

The idea behind Canlan Ice Sports and Getty Realty 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.