Correlation Between NORFOLK and Canlan Ice

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Can any of the company-specific risk be diversified away by investing in both NORFOLK and Canlan Ice 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 NORFOLK and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORFOLK SOUTHN P and Canlan Ice Sports, you can compare the effects of market volatilities on NORFOLK and Canlan Ice 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 NORFOLK with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORFOLK and Canlan Ice.

Diversification Opportunities for NORFOLK and Canlan Ice

NORFOLKCanlanDiversified AwayNORFOLKCanlanDiversified Away100%
-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between NORFOLK and Canlan is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding NORFOLK SOUTHN P and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and NORFOLK 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 NORFOLK SOUTHN P are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of NORFOLK i.e., NORFOLK and Canlan Ice go up and down completely randomly.

Pair Corralation between NORFOLK and Canlan Ice

Assuming the 90 days trading horizon NORFOLK SOUTHN P is expected to under-perform the Canlan Ice. In addition to that, NORFOLK is 2.08 times more volatile than Canlan Ice Sports. It trades about -0.06 of its total potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of volatility. If you would invest  294.00  in Canlan Ice Sports on October 20, 2024 and sell it today you would earn a total of  3.00  from holding Canlan Ice Sports or generate 1.02% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy91.94%
ValuesDaily Returns

NORFOLK SOUTHN P  vs.  Canlan Ice Sports

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -5-4-3-2-101
JavaScript chart by amCharts 3.21.15655844BZ0 CNLFF
       Timeline  
NORFOLK SOUTHN P 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NORFOLK SOUTHN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NORFOLK is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.1523233122602227236022929394959697
Canlan Ice Sports 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2.942.9452.952.9552.962.9652.97

NORFOLK and Canlan Ice Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.89-1.41-0.93-0.45-0.0079180.410.891.371.852.33 510152025
JavaScript chart by amCharts 3.21.15655844BZ0 CNLFF
       Returns  

Pair Trading with NORFOLK and Canlan Ice

The main advantage of trading using opposite NORFOLK and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORFOLK position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.
The idea behind NORFOLK SOUTHN P and Canlan Ice Sports 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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