Correlation Between Canadian Utilities and Elixxer

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

Diversification Opportunities for Canadian Utilities and Elixxer

0.0

Correlation Coefficient

Canadian Utilities  Elixxer

Pay attention - limited upside

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

Pair Corralation between Canadian Utilities and Elixxer

If you would invest  115.00  in Elixxer on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Elixxer or generate 0.0% return on investment over 90 days.

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

Canadian Utilities Limited  vs.  Elixxer

Canadian Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canadian Utilities Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Canadian Utilities is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Elixxer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elixxer has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Elixxer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Canadian Utilities and Elixxer

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

The idea behind Canadian Utilities Limited and Elixxer 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.