Correlation Between Canlan Ice and Infinico Metals

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

Diversification Opportunities for Canlan Ice and Infinico Metals

-0.58

Correlation Coefficient

Canlan Ice  Infinico Metals

Excellent diversification

The 3 months correlation between Canlan and Infinico is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Infinico Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinico Metals Corp 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 Infinico Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinico Metals Corp has no effect on the direction of Canlan Ice i.e., Canlan Ice and Infinico Metals go up and down completely randomly.

Pair Corralation between Canlan Ice and Infinico Metals

Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.25 times more return on investment than Infinico Metals. However, Canlan Ice Sports is 4.03 times less risky than Infinico Metals. It trades about 0.07 of its potential returns per unit of risk. Infinico Metals Corp is currently generating about -0.01 per unit of risk. If you would invest  382.00  in Canlan Ice Sports on September 5, 2024 and sell it today you would earn a total of  28.00  from holding Canlan Ice Sports or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Canlan Ice Sports  vs.  Infinico Metals Corp

Canlan Ice Sports

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canlan Ice Sports are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Canlan Ice may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Infinico Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infinico Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Infinico Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Canlan Ice and Infinico Metals

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

The idea behind Canlan Ice Sports and Infinico Metals 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.