Correlation Between Canadian General and Analog Devices

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

By analyzing existing cross correlation between Canadian General Investments and Analog Devices, you can compare the effects of market volatilities on Canadian General and Analog Devices 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 Canadian General with a short position of Analog Devices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian General and Analog Devices.

Diversification Opportunities for Canadian General and Analog Devices

0.92

Correlation Coefficient

Canadian General  Analog Devices

Almost no diversification

The 3 months correlation between Canadian and Analog is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Analog Devices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Devices and Canadian General 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 Canadian General Investments are associated (or correlated) with Analog Devices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Devices has no effect on the direction of Canadian General i.e., Canadian General and Analog Devices go up and down completely randomly.

Pair Corralation between Canadian General and Analog Devices

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.64 times more return on investment than Analog Devices. However, Canadian General Investments is 1.56 times less risky than Analog Devices. It trades about 0.3 of its potential returns per unit of risk. Analog Devices is currently generating about 0.18 per unit of risk. If you would invest  177,749  in Canadian General Investments on April 24, 2025 and sell it today you would earn a total of  41,751  from holding Canadian General Investments or generate 23.49% return on investment over 90 days.

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

Canadian General Investments  vs.  Analog Devices

Canadian General Inv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian General Investments are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Canadian General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Analog Devices

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Devices are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Analog Devices unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian General and Analog Devices

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

The idea behind Canadian General Investments and Analog Devices 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.

Check out your portfolio center.

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 Global Correlations module to find global opportunities by holding instruments from different markets.