Correlation Between Morguard Real and Canaccord Genuity

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

By analyzing existing cross correlation between Morguard Real Estate and Canaccord Genuity Group, you can compare the effects of market volatilities on Morguard Real and Canaccord Genuity 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 Morguard Real with a short position of Canaccord Genuity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morguard Real and Canaccord Genuity.

Diversification Opportunities for Morguard Real and Canaccord Genuity

-0.34

Correlation Coefficient

Morguard Real  Canaccord Genuity

Very good diversification

The 3 months correlation between Morguard and Canaccord is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Morguard Real Estate and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity and Morguard Real 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 Morguard Real Estate are associated (or correlated) with Canaccord Genuity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaccord Genuity has no effect on the direction of Morguard Real i.e., Morguard Real and Canaccord Genuity go up and down completely randomly.

Pair Corralation between Morguard Real and Canaccord Genuity

Assuming the 90 days trading horizon Morguard Real Estate is expected to under-perform the Canaccord Genuity. But the stock apears to be less risky and, when comparing its historical volatility, Morguard Real Estate is 1.49 times less risky than Canaccord Genuity. The stock trades about -0.01 of its potential returns per unit of risk. The Canaccord Genuity Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  858.00  in Canaccord Genuity Group on September 19, 2024 and sell it today you would earn a total of  179.00  from holding Canaccord Genuity Group or generate 20.86% return on investment over 90 days.

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

Morguard Real Estate  vs.  Canaccord Genuity Group

Morguard Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Canaccord Genuity

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canaccord Genuity Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Canaccord Genuity displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Morguard Real and Canaccord Genuity

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

The idea behind Morguard Real Estate and Canaccord Genuity Group 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.