Correlation Between Canoe EIT and Aclara Resources

Can any of the company-specific risk be diversified away by investing in both Canoe EIT and Aclara Resources 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 Canoe EIT and Aclara Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canoe EIT Income and Aclara Resources, you can compare the effects of market volatilities on Canoe EIT and Aclara Resources 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 Canoe EIT with a short position of Aclara Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canoe EIT and Aclara Resources.

Diversification Opportunities for Canoe EIT and Aclara Resources

-0.44

Correlation Coefficient

Canoe EIT  Aclara Resources

Very good diversification

The 3 months correlation between Canoe and Aclara is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and Aclara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aclara Resources and Canoe EIT 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 Canoe EIT Income are associated (or correlated) with Aclara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aclara Resources has no effect on the direction of Canoe EIT i.e., Canoe EIT and Aclara Resources go up and down completely randomly.

Pair Corralation between Canoe EIT and Aclara Resources

Assuming the 90 days trading horizon Canoe EIT is expected to generate 1.82 times less return on investment than Aclara Resources. But when comparing it to its historical volatility, Canoe EIT Income is 8.89 times less risky than Aclara Resources. It trades about 0.11 of its potential returns per unit of risk. Aclara Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  50.00  in Aclara Resources on October 15, 2024 and sell it today you would lose (3.00) from holding Aclara Resources or give up 6.0% of portfolio value over 90 days.

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

Canoe EIT Income  vs.  Aclara Resources

Canoe EIT Income

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canoe EIT Income are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Canoe EIT is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Aclara Resources

Risk-Adjusted Performance

0 of 100

Insignificant

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

Pair Trading with Canoe EIT and Aclara Resources

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

The idea behind Canoe EIT Income and Aclara Resources 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.