Correlation Between Canlan Ice and Nutrien

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

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

Diversification Opportunities for Canlan Ice and Nutrien

-0.4

Correlation Coefficient

Canlan Ice  Nutrien

Very good diversification

The 3 months correlation between Canlan and Nutrien is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Nutrien in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nutrien and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with Nutrien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nutrien has no effect on the direction of Canlan Ice i.e., Canlan Ice and Nutrien go up and down completely randomly.

Pair Corralation between Canlan Ice and Nutrien

Assuming the 90 days trading horizon Canlan Ice Sports is expected to under-perform the Nutrien. In addition to that, Canlan Ice is 1.03 times more volatile than Nutrien. It trades about -0.11 of its total potential returns per unit of risk. Nutrien is currently generating about 0.47 per unit of volatility. If you would invest  6,338  in Nutrien on October 24, 2024 and sell it today you would earn a total of  1,017  from holding Nutrien or generate 16.05% return on investment over 90 days.

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

Canlan Ice Sports  vs.  Nutrien

Canlan Ice Sports

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Nutrien

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Nutrien may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Canlan Ice and Nutrien

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

The idea behind Canlan Ice Sports and Nutrien 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..