Correlation Between Canlan Ice and Hardwoods Distribution

Can any of the company-specific risk be diversified away by investing in both Canlan Ice and Hardwoods Distribution 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 Hardwoods Distribution 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 Hardwoods Distribution, you can compare the effects of market volatilities on Canlan Ice and Hardwoods Distribution 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 Hardwoods Distribution. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Hardwoods Distribution.

Diversification Opportunities for Canlan Ice and Hardwoods Distribution

0.0

Correlation Coefficient

Canlan Ice  Hardwoods Distribution

Pay attention - limited upside

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

Pair Corralation between Canlan Ice and Hardwoods Distribution

If you would invest  404.00  in Canlan Ice Sports on September 20, 2024 and sell it today you would earn a total of  3.00  from holding Canlan Ice Sports or generate 0.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Canlan Ice Sports  vs.  Hardwoods Distribution

Canlan Ice Sports

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Canlan Ice is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Hardwoods Distribution

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hardwoods Distribution has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Hardwoods Distribution is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Canlan Ice and Hardwoods Distribution

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

The idea behind Canlan Ice Sports and Hardwoods Distribution 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.