Correlation Between Eco Atlantic and Canadian Apartment

Can any of the company-specific risk be diversified away by investing in both Eco Atlantic and Canadian 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 Eco Atlantic and Canadian Apartment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Eco Atlantic Oil and Canadian Apartment Properties, you can compare the effects of market volatilities on Eco Atlantic and Canadian 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 Eco Atlantic with a short position of Canadian Apartment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco Atlantic and Canadian Apartment.

Diversification Opportunities for Eco Atlantic and Canadian Apartment

-0.27

Correlation Coefficient

Eco Atlantic  Canadian Apartment

Very good diversification

The 3 months correlation between Eco and Canadian is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eco Atlantic Oil and Canadian Apartment Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Apartment and Eco Atlantic 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 Eco Atlantic Oil are associated (or correlated) with Canadian Apartment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Apartment has no effect on the direction of Eco Atlantic i.e., Eco Atlantic and Canadian Apartment go up and down completely randomly.

Pair Corralation between Eco Atlantic and Canadian Apartment

Assuming the 90 days horizon Eco Atlantic Oil is expected to under-perform the Canadian Apartment. In addition to that, Eco Atlantic is 2.36 times more volatile than Canadian Apartment Properties. It trades about -0.06 of its total potential returns per unit of risk. Canadian Apartment Properties is currently generating about 0.06 per unit of volatility. If you would invest  4,097  in Canadian Apartment Properties on December 30, 2024 and sell it today you would earn a total of  221.00  from holding Canadian Apartment Properties or generate 5.39% return on investment over 90 days.

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

Eco Atlantic Oil  vs.  Canadian Apartment Properties

Eco Atlantic Oil

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eco Atlantic Oil has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Canadian Apartment

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Eco Atlantic and Canadian Apartment

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

The idea behind Eco Atlantic Oil and Canadian Apartment Properties 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.