Correlation Between Canada Goose and BLAC Old

Can any of the company-specific risk be diversified away by investing in both Canada Goose and BLAC Old 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 Canada Goose and BLAC Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canada Goose Holdings and BLAC Old, you can compare the effects of market volatilities on Canada Goose and BLAC Old 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 Canada Goose with a short position of BLAC Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and BLAC Old.

Diversification Opportunities for Canada Goose and BLAC Old

0.48

Correlation Coefficient

Canada Goose  BLAC Old

Very weak diversification

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

Pair Corralation between Canada Goose and BLAC Old

Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 0.27 times more return on investment than BLAC Old. However, Canada Goose Holdings is 3.74 times less risky than BLAC Old. It trades about -0.08 of its potential returns per unit of risk. BLAC Old is currently generating about -0.21 per unit of risk. If you would invest  1,011  in Canada Goose Holdings on December 26, 2024 and sell it today you would lose (172.00) from holding Canada Goose Holdings or give up 17.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	57.38%
Values	Daily Returns

Canada Goose Holdings  vs.  BLAC Old

Canada Goose Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canada Goose Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BLAC Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days BLAC Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Canada Goose and BLAC Old

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

The idea behind Canada Goose Holdings and BLAC Old 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.