Correlation Between Canoe EIT and MINT Income

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

Diversification Opportunities for Canoe EIT and MINT Income

0.48

Correlation Coefficient

Canoe EIT  MINT Income

Very weak diversification

The 3 months correlation between Canoe and MINT is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Canoe EIT Income and MINT Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MINT Income Fund 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 MINT Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MINT Income Fund has no effect on the direction of Canoe EIT i.e., Canoe EIT and MINT Income go up and down completely randomly.

Pair Corralation between Canoe EIT and MINT Income

Assuming the 90 days trading horizon Canoe EIT Income is expected to generate 0.63 times more return on investment than MINT Income. However, Canoe EIT Income is 1.58 times less risky than MINT Income. It trades about 0.04 of its potential returns per unit of risk. MINT Income Fund is currently generating about 0.02 per unit of risk. If you would invest  1,493  in Canoe EIT Income on September 22, 2024 and sell it today you would earn a total of  14.00  from holding Canoe EIT Income or generate 0.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.78%
Values	Daily Returns

Canoe EIT Income  vs.  MINT Income Fund

Canoe EIT Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canoe EIT Income are ranked lower than 13 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

MINT Income Fund

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MINT Income Fund are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, MINT Income is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canoe EIT and MINT Income

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

The idea behind Canoe EIT Income and MINT Income Fund 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.