Correlation Between Canada Goose and Zedge

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

Diversification Opportunities for Canada Goose and Zedge

0.95

Correlation Coefficient

Canada Goose  Zedge

Almost no diversification

The 3 months correlation between Canada and Zedge is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Canada Goose Holdings and Zedge Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zedge 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 Zedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zedge Inc has no effect on the direction of Canada Goose i.e., Canada Goose and Zedge go up and down completely randomly.

Pair Corralation between Canada Goose and Zedge

Given the investment horizon of 90 days Canada Goose Holdings is expected to generate 0.77 times more return on investment than Zedge. However, Canada Goose Holdings is 1.3 times less risky than Zedge. It trades about -0.01 of its potential returns per unit of risk. Zedge Inc is currently generating about -0.02 per unit of risk. If you would invest  1,050  in Canada Goose Holdings on September 13, 2024 and sell it today you would lose (49.00) from holding Canada Goose Holdings or give up 4.67% of portfolio value over 90 days.

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

Canada Goose Holdings  vs.  Zedge Inc

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 comparatively stable basic indicators, Canada Goose is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Zedge Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zedge Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Zedge is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Canada Goose and Zedge

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

The idea behind Canada Goose Holdings and Zedge Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..