Correlation Between Getty Realty and Canlan Ice

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

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

Diversification Opportunities for Getty Realty and Canlan Ice

-0.38

Correlation Coefficient

Getty Realty  Canlan Ice

Very good diversification

The 3 months correlation between Getty and Canlan is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Getty Realty 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 Getty Realty 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 Getty Realty 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 Getty Realty i.e., Getty Realty and Canlan Ice go up and down completely randomly.

Pair Corralation between Getty Realty and Canlan Ice

Considering the 90-day investment horizon Getty Realty is expected to under-perform the Canlan Ice. In addition to that, Getty Realty is 9.4 times more volatile than Canlan Ice Sports. It trades about 0.0 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of volatility. If you would invest  272.00  in Canlan Ice Sports on October 7, 2024 and sell it today you would earn a total of  25.00  from holding Canlan Ice Sports or generate 9.19% return on investment over 90 days.

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

Getty Realty  vs.  Canlan Ice Sports

Getty Realty

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Getty Realty has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Getty Realty is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Canlan Ice Sports

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Getty Realty and Canlan Ice

The main advantage of trading using opposite Getty Realty and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Getty Realty 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 Getty Realty 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.