Correlation Between Canadian Pacific and GreenPro Capital

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

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

Diversification Opportunities for Canadian Pacific and GreenPro Capital

-0.33

Correlation Coefficient

Canadian Pacific  GreenPro Capital

Very good diversification

The 3 months correlation between Canadian and GreenPro is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Pacific Railway and GreenPro Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenPro Capital Corp and Canadian Pacific 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 Canadian Pacific Railway are associated (or correlated) with GreenPro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenPro Capital Corp has no effect on the direction of Canadian Pacific i.e., Canadian Pacific and GreenPro Capital go up and down completely randomly.

Pair Corralation between Canadian Pacific and GreenPro Capital

Allowing for the 90-day total investment horizon Canadian Pacific Railway is expected to under-perform the GreenPro Capital. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Pacific Railway is 6.24 times less risky than GreenPro Capital. The stock trades about -0.21 of its potential returns per unit of risk. The GreenPro Capital Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  95.00  in GreenPro Capital Corp on September 15, 2024 and sell it today you would earn a total of  7.00  from holding GreenPro Capital Corp or generate 7.37% return on investment over 90 days.

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

Canadian Pacific Railway  vs.  GreenPro Capital Corp

Canadian Pacific Railway

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canadian Pacific Railway has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

GreenPro Capital Corp

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GreenPro Capital Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, GreenPro Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian Pacific and GreenPro Capital

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

The idea behind Canadian Pacific Railway and GreenPro Capital Corp 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.

Check out your portfolio center.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..