Correlation Between Scandium Canada and Canaccord Genuity

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

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

Diversification Opportunities for Scandium Canada and Canaccord Genuity

-0.35

Correlation Coefficient

Scandium Canada  Canaccord Genuity

Very good diversification

The 3 months correlation between Scandium and Canaccord is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Scandium Canada and Canaccord Genuity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaccord Genuity and Scandium Canada 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 Scandium Canada 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 Scandium Canada i.e., Scandium Canada and Canaccord Genuity go up and down completely randomly.

Pair Corralation between Scandium Canada and Canaccord Genuity

Assuming the 90 days horizon Scandium Canada is expected to generate 4.95 times more return on investment than Canaccord Genuity. However, Scandium Canada is 4.95 times more volatile than Canaccord Genuity Group. It trades about 0.01 of its potential returns per unit of risk. Canaccord Genuity Group is currently generating about 0.01 per unit of risk. If you would invest  9.00  in Scandium Canada on October 4, 2024 and sell it today you would lose (7.50) from holding Scandium Canada or give up 83.33% of portfolio value over 90 days.

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

Scandium Canada  vs.  Canaccord Genuity Group

Scandium Canada

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Scandium Canada are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Scandium Canada showed solid returns over the last few months and may actually be approaching a breakup point.

Canaccord Genuity

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Canaccord Genuity Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Canaccord Genuity displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scandium Canada and Canaccord Genuity

The main advantage of trading using opposite Scandium Canada and Canaccord Genuity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandium Canada 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 Scandium Canada 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.