Correlation Between Canadian General and Globex Mining

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

Diversification Opportunities for Canadian General and Globex Mining

-0.17

Correlation Coefficient

Canadian General  Globex Mining

Good diversification

The 3 months correlation between Canadian and Globex is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Canadian General Investments and Globex Mining Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globex Mining Enterprises 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 Globex Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globex Mining Enterprises has no effect on the direction of Canadian General i.e., Canadian General and Globex Mining go up and down completely randomly.

Pair Corralation between Canadian General and Globex Mining

Assuming the 90 days trading horizon Canadian General Investments is expected to generate 0.39 times more return on investment than Globex Mining. However, Canadian General Investments is 2.56 times less risky than Globex Mining. It trades about 0.32 of its potential returns per unit of risk. Globex Mining Enterprises is currently generating about -0.02 per unit of risk. If you would invest  3,244  in Canadian General Investments on April 20, 2025 and sell it today you would earn a total of  831.00  from holding Canadian General Investments or generate 25.62% return on investment over 90 days.

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

Canadian General Investments  vs.  Globex Mining Enterprises

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 25 (%) 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.

Globex Mining Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Globex Mining Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Globex Mining is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Canadian General and Globex Mining

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

The idea behind Canadian General Investments and Globex Mining Enterprises 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.