Correlation Between Canlan Ice and OS Therapies

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

By analyzing existing cross correlation between Canlan Ice Sports and OS Therapies Incorporated, you can compare the effects of market volatilities on Canlan Ice and OS Therapies 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 Canlan Ice with a short position of OS Therapies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and OS Therapies.

Diversification Opportunities for Canlan Ice and OS Therapies

-0.36

Correlation Coefficient

Canlan Ice  OS Therapies

Very good diversification

The 3 months correlation between Canlan and OSTX is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and OS Therapies Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OS Therapies and Canlan Ice 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 Canlan Ice Sports are associated (or correlated) with OS Therapies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OS Therapies has no effect on the direction of Canlan Ice i.e., Canlan Ice and OS Therapies go up and down completely randomly.

Pair Corralation between Canlan Ice and OS Therapies

Assuming the 90 days horizon Canlan Ice is expected to generate 36.41 times less return on investment than OS Therapies. But when comparing it to its historical volatility, Canlan Ice Sports is 68.27 times less risky than OS Therapies. It trades about 0.18 of its potential returns per unit of risk. OS Therapies Incorporated is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  348.00  in OS Therapies Incorporated on September 20, 2024 and sell it today you would earn a total of  123.00  from holding OS Therapies Incorporated or generate 35.34% return on investment over 90 days.

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

Canlan Ice Sports  vs.  OS Therapies Incorporated

Canlan Ice Sports

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 13 (%) 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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

OS Therapies

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OS Therapies Incorporated are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, OS Therapies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canlan Ice and OS Therapies

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

The idea behind Canlan Ice Sports and OS Therapies Incorporated 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.