Correlation Between Canlan Ice and Andlauer HealthcareGr

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

Diversification Opportunities for Canlan Ice and Andlauer HealthcareGr

-0.5

Correlation Coefficient

Canlan Ice  Andlauer HealthcareGr

Very good diversification

The 3 months correlation between Canlan and Andlauer is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports and Andlauer HealthcareGr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andlauer HealthcareGr 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 Andlauer HealthcareGr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andlauer HealthcareGr has no effect on the direction of Canlan Ice i.e., Canlan Ice and Andlauer HealthcareGr go up and down completely randomly.

Pair Corralation between Canlan Ice and Andlauer HealthcareGr

Assuming the 90 days trading horizon Canlan Ice Sports is expected to under-perform the Andlauer HealthcareGr. In addition to that, Canlan Ice is 5.76 times more volatile than Andlauer HealthcareGr. It trades about -0.1 of its total potential returns per unit of risk. Andlauer HealthcareGr is currently generating about -0.29 per unit of volatility. If you would invest  4,293  in Andlauer HealthcareGr on January 30, 2024 and sell it today you would lose (139.00) from holding Andlauer HealthcareGr or give up 3.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Canlan Ice Sports  vs.  Andlauer HealthcareGr

Canlan Ice Sports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Canlan Ice Sports has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Andlauer HealthcareGr

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Andlauer HealthcareGr are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Andlauer HealthcareGr may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Canlan Ice and Andlauer HealthcareGr

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

The idea behind Canlan Ice Sports and Andlauer HealthcareGr 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..