Correlation Between Canada Goose and Royalty Management

Can any of the company-specific risk be diversified away by investing in both Canada Goose and Royalty Management 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 Royalty Management 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 Royalty Management Holding, you can compare the effects of market volatilities on Canada Goose and Royalty Management 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 Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and Royalty Management.

Diversification Opportunities for Canada Goose and Royalty Management

-0.48

Correlation Coefficient

Canada Goose  Royalty Management

Very good diversification

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

Pair Corralation between Canada Goose and Royalty Management

Given the investment horizon of 90 days Canada Goose Holdings is expected to under-perform the Royalty Management. But the stock apears to be less risky and, when comparing its historical volatility, Canada Goose Holdings is 2.1 times less risky than Royalty Management. The stock trades about -0.07 of its potential returns per unit of risk. The Royalty Management Holding is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Royalty Management Holding on October 13, 2024 and sell it today you would earn a total of  4.00  from holding Royalty Management Holding or generate 4.17% return on investment over 90 days.

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

Canada Goose Holdings  vs.  Royalty Management Holding

Canada Goose Holdings

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Royalty Management

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Royalty Management Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Royalty Management may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Canada Goose and Royalty Management

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

The idea behind Canada Goose Holdings and Royalty Management Holding 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.