Correlation Between Transcontinental and Corus Entertainment

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

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

Diversification Opportunities for Transcontinental and Corus Entertainment

0.11

Correlation Coefficient

Transcontinental  Corus Entertainment

Average diversification

The 3 months correlation between Transcontinental and Corus is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment and Transcontinental 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 Transcontinental are associated (or correlated) with Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Transcontinental i.e., Transcontinental and Corus Entertainment go up and down completely randomly.

Pair Corralation between Transcontinental and Corus Entertainment

Assuming the 90 days trading horizon Transcontinental is expected to generate 0.15 times more return on investment than Corus Entertainment. However, Transcontinental is 6.8 times less risky than Corus Entertainment. It trades about 0.11 of its potential returns per unit of risk. Corus Entertainment is currently generating about 0.0 per unit of risk. If you would invest  1,646  in Transcontinental on September 4, 2024 and sell it today you would earn a total of  143.00  from holding Transcontinental or generate 8.69% return on investment over 90 days.

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

Transcontinental  vs.  Corus Entertainment

Transcontinental

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transcontinental are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Transcontinental may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Corus Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Corus Entertainment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Transcontinental and Corus Entertainment

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

The idea behind Transcontinental and Corus Entertainment 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.