Correlation Between Canada Goose and FREEPORT

Can any of the company-specific risk be diversified away by investing in both Canada Goose and FREEPORT 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 FREEPORT 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 FREEPORT MCMORAN INC 525, you can compare the effects of market volatilities on Canada Goose and FREEPORT 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 FREEPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Goose and FREEPORT.

Diversification Opportunities for Canada Goose and FREEPORT

0.15

Correlation Coefficient

Canada Goose  FREEPORT

Average diversification

The 3 months correlation between Canada and FREEPORT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and FREEPORT MCMORAN INC 525 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREEPORT MCMORAN INC 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 FREEPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREEPORT MCMORAN INC has no effect on the direction of Canada Goose i.e., Canada Goose and FREEPORT go up and down completely randomly.

Pair Corralation between Canada Goose and FREEPORT

Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 4.25 times more return on investment than FREEPORT. However, Canada Goose is 4.25 times more volatile than FREEPORT MCMORAN INC 525. It trades about 0.12 of its potential returns per unit of risk. FREEPORT MCMORAN INC 525 is currently generating about -0.11 per unit of risk. If you would invest  970.00  in Canada Goose Holdings on September 26, 2024 and sell it today you would earn a total of  40.00  from holding Canada Goose Holdings or generate 4.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Canada Goose Holdings  vs.  FREEPORT MCMORAN INC 525

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 525 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FREEPORT is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Canada Goose and FREEPORT

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

The idea behind Canada Goose Holdings and FREEPORT MCMORAN INC 525 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.