Correlation Between XXIX Metal and Canadian Utilities

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

By analyzing existing cross correlation between XXIX Metal Corp and Canadian Utilities Ltd, you can compare the effects of market volatilities on XXIX Metal and Canadian Utilities 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 XXIX Metal with a short position of Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of XXIX Metal and Canadian Utilities.

Diversification Opportunities for XXIX Metal and Canadian Utilities

0.16

Correlation Coefficient

XXIX Metal  Canadian Utilities

Average diversification

The 3 months correlation between XXIX and Canadian is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding XXIX Metal Corp and Canadian Utilities Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities and XXIX Metal 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 XXIX Metal Corp are associated (or correlated) with Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of XXIX Metal i.e., XXIX Metal and Canadian Utilities go up and down completely randomly.

Pair Corralation between XXIX Metal and Canadian Utilities

Assuming the 90 days trading horizon XXIX Metal Corp is expected to under-perform the Canadian Utilities. In addition to that, XXIX Metal is 13.73 times more volatile than Canadian Utilities Ltd. It trades about -0.08 of its total potential returns per unit of risk. Canadian Utilities Ltd is currently generating about -0.01 per unit of volatility. If you would invest  2,488  in Canadian Utilities Ltd on December 21, 2024 and sell it today you would lose (6.00) from holding Canadian Utilities Ltd or give up 0.24% of portfolio value over 90 days.

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

XXIX Metal Corp  vs.  Canadian Utilities Ltd

XXIX Metal Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days XXIX Metal Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Canadian Utilities

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian Utilities Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Canadian Utilities 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 XXIX Metal and Canadian Utilities

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

The idea behind XXIX Metal Corp and Canadian Utilities Ltd 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.