Correlation Between Canlan Ice and 090572AR9

Can any of the company-specific risk be diversified away by investing in both Canlan Ice and 090572AR9 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 090572AR9 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 BIO 33 15 MAR 27, you can compare the effects of market volatilities on Canlan Ice and 090572AR9 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 090572AR9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and 090572AR9.

Diversification Opportunities for Canlan Ice and 090572AR9

0.09

Correlation Coefficient

Canlan Ice  090572AR9

Significant diversification

The 3 months correlation between Canlan and 090572AR9 is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and BIO 33 15 MAR 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIO 33 15 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 090572AR9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIO 33 15 has no effect on the direction of Canlan Ice i.e., Canlan Ice and 090572AR9 go up and down completely randomly.

Pair Corralation between Canlan Ice and 090572AR9

Assuming the 90 days horizon Canlan Ice is expected to generate 1.38 times less return on investment than 090572AR9. But when comparing it to its historical volatility, Canlan Ice Sports is 2.69 times less risky than 090572AR9. It trades about 0.13 of its potential returns per unit of risk. BIO 33 15 MAR 27 is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  9,670  in BIO 33 15 MAR 27 on December 25, 2024 and sell it today you would earn a total of  82.00  from holding BIO 33 15 MAR 27 or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.67%
Values	Daily Returns

Canlan Ice Sports  vs.  BIO 33 15 MAR 27

Canlan Ice Sports

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 10 (%) 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

BIO 33 15

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BIO 33 15 MAR 27 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 090572AR9 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 090572AR9

The main advantage of trading using opposite Canlan Ice and 090572AR9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice position performs unexpectedly, 090572AR9 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 090572AR9 will offset losses from the drop in 090572AR9's long position.

The idea behind Canlan Ice Sports and BIO 33 15 MAR 27 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.