Correlation Between Rogers Communications and Cardinal Energy

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

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

Diversification Opportunities for Rogers Communications and Cardinal Energy

-0.35

Correlation Coefficient

Rogers Communications  Cardinal Energy

Very good diversification

The 3 months correlation between Rogers and Cardinal is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Energy and Rogers Communications 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 Rogers Communications are associated (or correlated) with Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Rogers Communications i.e., Rogers Communications and Cardinal Energy go up and down completely randomly.

Pair Corralation between Rogers Communications and Cardinal Energy

Assuming the 90 days trading horizon Rogers Communications is expected to under-perform the Cardinal Energy. In addition to that, Rogers Communications is 1.27 times more volatile than Cardinal Energy. It trades about -0.06 of its total potential returns per unit of risk. Cardinal Energy is currently generating about 0.03 per unit of volatility. If you would invest  627.00  in Cardinal Energy on September 12, 2024 and sell it today you would earn a total of  9.00  from holding Cardinal Energy or generate 1.44% return on investment over 90 days.

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

Rogers Communications  vs.  Cardinal Energy

Rogers Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rogers Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Rogers Communications is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Cardinal Energy

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Cardinal Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Rogers Communications and Cardinal Energy

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

The idea behind Rogers Communications and Cardinal Energy 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.