Correlation Between Mineral Financial and Canadian General

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

By analyzing existing cross correlation between Mineral Financial Investments and Canadian General Investments, you can compare the effects of market volatilities on Mineral Financial and Canadian General 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 Mineral Financial with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mineral Financial and Canadian General.

Diversification Opportunities for Mineral Financial and Canadian General

0.3

Correlation Coefficient

Mineral Financial  Canadian General

Weak diversification

The 3 months correlation between Mineral and Canadian is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mineral Financial Investments and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Mineral Financial 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 Mineral Financial Investments are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Mineral Financial i.e., Mineral Financial and Canadian General go up and down completely randomly.

Pair Corralation between Mineral Financial and Canadian General

Assuming the 90 days trading horizon Mineral Financial Investments is expected to generate 2.07 times more return on investment than Canadian General. However, Mineral Financial is 2.07 times more volatile than Canadian General Investments. It trades about 0.19 of its potential returns per unit of risk. Canadian General Investments is currently generating about 0.08 per unit of risk. If you would invest  1,100  in Mineral Financial Investments on October 26, 2024 and sell it today you would earn a total of  450.00  from holding Mineral Financial Investments or generate 40.91% return on investment over 90 days.

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

Mineral Financial Investments  vs.  Canadian General Investments

Mineral Financial

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mineral Financial Investments are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Mineral Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

Canadian General Inv

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian General Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Canadian General may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mineral Financial and Canadian General

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

The idea behind Mineral Financial Investments and Canadian General Investments 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.