Correlation Between Canadian Utilities and Arbor Metals
Can any of the company-specific risk be diversified away by investing in both Canadian Utilities and Arbor Metals 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 Utilities and Arbor Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Utilities Limited and Arbor Metals Corp, you can compare the effects of market volatilities on Canadian Utilities and Arbor Metals 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 Utilities with a short position of Arbor Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Utilities and Arbor Metals.
Diversification Opportunities for Canadian Utilities and Arbor Metals
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Arbor is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and Arbor Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Metals Corp and Canadian Utilities 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 Utilities Limited are associated (or correlated) with Arbor Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Metals Corp has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and Arbor Metals go up and down completely randomly.
Pair Corralation between Canadian Utilities and Arbor Metals
Assuming the 90 days horizon Canadian Utilities Limited is expected to under-perform the Arbor Metals. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Utilities Limited is 15.71 times less risky than Arbor Metals. The stock trades about -0.03 of its potential returns per unit of risk. The Arbor Metals Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Arbor Metals Corp on December 2, 2024 and sell it today you would earn a total of 9.00 from holding Arbor Metals Corp or generate 28.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Canadian Utilities Limited vs. Arbor Metals Corp
Performance |
Timeline |
Canadian Utilities |
Arbor Metals Corp |
Canadian Utilities and Arbor Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Canadian Utilities and Arbor Metals
The main advantage of trading using opposite Canadian Utilities and Arbor Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Utilities position performs unexpectedly, Arbor Metals 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 Arbor Metals will offset losses from the drop in Arbor Metals' long position.Canadian Utilities vs. Fortis Inc | Canadian Utilities vs. Emera Inc | Canadian Utilities vs. Algonquin Power Utilities | Canadian Utilities vs. ATCO |
Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |