Correlation Between Evertz Technologies and Canlan Ice

Can any of the company-specific risk be diversified away by investing in both Evertz Technologies and Canlan Ice 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 Evertz Technologies and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Evertz Technologies Limited and Canlan Ice Sports, you can compare the effects of market volatilities on Evertz Technologies and Canlan Ice 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 Evertz Technologies with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evertz Technologies and Canlan Ice.

Diversification Opportunities for Evertz Technologies and Canlan Ice

0.39

Correlation Coefficient

Evertz Technologies  Canlan Ice

Weak diversification

The 3 months correlation between Evertz and Canlan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Evertz Technologies Limited and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Evertz Technologies 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 Evertz Technologies Limited are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Evertz Technologies i.e., Evertz Technologies and Canlan Ice go up and down completely randomly.

Pair Corralation between Evertz Technologies and Canlan Ice

Assuming the 90 days horizon Evertz Technologies Limited is expected to generate 0.73 times more return on investment than Canlan Ice. However, Evertz Technologies Limited is 1.37 times less risky than Canlan Ice. It trades about 0.14 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about -0.14 per unit of risk. If you would invest  1,239  in Evertz Technologies Limited on October 8, 2024 and sell it today you would earn a total of  41.00  from holding Evertz Technologies Limited or generate 3.31% return on investment over 90 days.

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

Evertz Technologies Limited  vs.  Canlan Ice Sports

Evertz Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Evertz Technologies Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Evertz Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Canlan Ice Sports

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Evertz Technologies and Canlan Ice

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

The idea behind Evertz Technologies Limited and Canlan Ice Sports 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.