Correlation Between Autocanada and Planting Hope

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

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

Diversification Opportunities for Autocanada and Planting Hope

0.0

Correlation Coefficient

Autocanada  Planting Hope

Pay attention - limited upside

The 3 months correlation between Autocanada and Planting is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Planting Hope Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planting Hope and Autocanada 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 Autocanada are associated (or correlated) with Planting Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planting Hope has no effect on the direction of Autocanada i.e., Autocanada and Planting Hope go up and down completely randomly.

Pair Corralation between Autocanada and Planting Hope

If you would invest  1,457  in Autocanada on September 15, 2024 and sell it today you would earn a total of  383.00  from holding Autocanada or generate 26.29% return on investment over 90 days.

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

Autocanada  vs.  Planting Hope Co

Autocanada

Risk-Adjusted Performance

9 of 100

OK

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

Planting Hope

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Planting Hope Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Planting Hope is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Autocanada and Planting Hope

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

The idea behind Autocanada and Planting Hope Co 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.