Correlation Between Canadian Utilities and MAVEN WIRELESS

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

Diversification Opportunities for Canadian Utilities and MAVEN WIRELESS

-0.51

Correlation Coefficient

Canadian Utilities  MAVEN WIRELESS

Excellent diversification

The 3 months correlation between Canadian and MAVEN is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Utilities Limited and MAVEN WIRELESS SWEDEN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAVEN WIRELESS SWEDEN 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 MAVEN WIRELESS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAVEN WIRELESS SWEDEN has no effect on the direction of Canadian Utilities i.e., Canadian Utilities and MAVEN WIRELESS go up and down completely randomly.

Pair Corralation between Canadian Utilities and MAVEN WIRELESS

Assuming the 90 days horizon Canadian Utilities Limited is expected to generate 0.46 times more return on investment than MAVEN WIRELESS. However, Canadian Utilities Limited is 2.16 times less risky than MAVEN WIRELESS. It trades about 0.11 of its potential returns per unit of risk. MAVEN WIRELESS SWEDEN is currently generating about -0.1 per unit of risk. If you would invest  2,215  in Canadian Utilities Limited on September 3, 2024 and sell it today you would earn a total of  184.00  from holding Canadian Utilities Limited or generate 8.31% 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.  MAVEN WIRELESS SWEDEN

Canadian Utilities

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Utilities Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Canadian Utilities may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MAVEN WIRELESS SWEDEN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MAVEN WIRELESS SWEDEN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Canadian Utilities and MAVEN WIRELESS

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

The idea behind Canadian Utilities Limited and MAVEN WIRELESS SWEDEN 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.