Correlation Between Canadian General and Firm Capital

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

Diversification Opportunities for Canadian General and Firm Capital

0.3

Correlation Coefficient

Canadian General  Firm Capital

Weak diversification

The 3 months correlation between Canadian and Firm is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Firm Capital Apartment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Apartment 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 Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Apartment has no effect on the direction of Canadian General i.e., Canadian General and Firm Capital go up and down completely randomly.

Pair Corralation between Canadian General and Firm Capital

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.23 times more return on investment than Firm Capital. However, Canadian General Investments is 4.42 times less risky than Firm Capital. It trades about 0.24 of its potential returns per unit of risk. Firm Capital Apartment is currently generating about -0.07 per unit of risk. If you would invest  3,525  in Canadian General Investments on April 24, 2025 and sell it today you would earn a total of  550.00  from holding Canadian General Investments or generate 15.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Canadian General Investments  vs.  Firm Capital Apartment

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 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Canadian General displayed solid returns over the last few months and may actually be approaching a breakup point.

Firm Capital Apartment

Risk-Adjusted Performance

OK

Over the last 90 days Firm Capital Apartment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Canadian General and Firm Capital

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

The idea behind Canadian General Investments and Firm Capital Apartment 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.