Correlation Between Altagas Cum and Bombardier

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

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

Diversification Opportunities for Altagas Cum and Bombardier

-0.1

Correlation Coefficient

Altagas Cum  Bombardier

Good diversification

The 3 months correlation between Altagas and Bombardier is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and Bombardier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bombardier and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with Bombardier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bombardier has no effect on the direction of Altagas Cum i.e., Altagas Cum and Bombardier go up and down completely randomly.

Pair Corralation between Altagas Cum and Bombardier

Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 0.25 times more return on investment than Bombardier. However, Altagas Cum Red is 3.93 times less risky than Bombardier. It trades about 0.14 of its potential returns per unit of risk. Bombardier is currently generating about -0.01 per unit of risk. If you would invest  1,882  in Altagas Cum Red on September 21, 2024 and sell it today you would earn a total of  111.00  from holding Altagas Cum Red or generate 5.9% return on investment over 90 days.

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

Altagas Cum Red  vs.  Bombardier

Altagas Cum Red

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Bombardier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bombardier has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bombardier 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 Altagas Cum and Bombardier

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

The idea behind Altagas Cum Red and Bombardier 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.