Correlation Between Canoe EIT and Killam Apartment

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

Diversification Opportunities for Canoe EIT and Killam Apartment

-0.61

Correlation Coefficient

Canoe EIT  Killam Apartment

Excellent diversification

The 3 months correlation between Canoe and Killam is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and Killam Apartment Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Killam Apartment Real 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 Killam Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Killam Apartment Real has no effect on the direction of Canoe EIT i.e., Canoe EIT and Killam Apartment go up and down completely randomly.

Pair Corralation between Canoe EIT and Killam Apartment

Assuming the 90 days trading horizon Canoe EIT Income is expected to generate 0.59 times more return on investment than Killam Apartment. However, Canoe EIT Income is 1.7 times less risky than Killam Apartment. It trades about 0.05 of its potential returns per unit of risk. Killam Apartment Real is currently generating about -0.25 per unit of risk. If you would invest  1,491  in Canoe EIT Income on October 15, 2024 and sell it today you would earn a total of  26.00  from holding Canoe EIT Income or generate 1.74% return on investment over 90 days.

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

Canoe EIT Income  vs.  Killam Apartment Real

Canoe EIT Income

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canoe EIT Income are ranked lower than 3 (%) 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.

Killam Apartment Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Killam Apartment Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Canoe EIT and Killam Apartment

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

The idea behind Canoe EIT Income and Killam Apartment Real 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.