Correlation Between Autocanada and Element Fleet

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

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

Diversification Opportunities for Autocanada and Element Fleet

0.89

Correlation Coefficient

Autocanada  Element Fleet

Very poor diversification

The 3 months correlation between Autocanada and Element is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management and Autocanada 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 Autocanada are associated (or correlated) with Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of Autocanada i.e., Autocanada and Element Fleet go up and down completely randomly.

Pair Corralation between Autocanada and Element Fleet

Assuming the 90 days trading horizon Autocanada is expected to generate 3.22 times more return on investment than Element Fleet. However, Autocanada is 3.22 times more volatile than Element Fleet Management. It trades about 0.33 of its potential returns per unit of risk. Element Fleet Management is currently generating about 0.27 per unit of risk. If you would invest  1,574  in Autocanada on April 24, 2025 and sell it today you would earn a total of  1,269  from holding Autocanada or generate 80.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Autocanada  vs.  Element Fleet Management

Autocanada

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Autocanada are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Autocanada displayed solid returns over the last few months and may actually be approaching a breakup point.

Element Fleet Management

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Element Fleet Management are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Element Fleet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Autocanada and Element Fleet

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

The idea behind Autocanada and Element Fleet Management 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.