Correlation Between Canadian Natural and Perimeter Medical

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

By analyzing existing cross correlation between Canadian Natural Resources and Perimeter Medical Imaging, you can compare the effects of market volatilities on Canadian Natural and Perimeter Medical 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 Natural with a short position of Perimeter Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Perimeter Medical.

Diversification Opportunities for Canadian Natural and Perimeter Medical

-0.6

Correlation Coefficient

Canadian Natural  Perimeter Medical

Excellent diversification

The 3 months correlation between Canadian and Perimeter is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Perimeter Medical Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Medical Imaging and Canadian Natural 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 Natural Resources are associated (or correlated) with Perimeter Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Medical Imaging has no effect on the direction of Canadian Natural i.e., Canadian Natural and Perimeter Medical go up and down completely randomly.

Pair Corralation between Canadian Natural and Perimeter Medical

Assuming the 90 days trading horizon Canadian Natural Resources is expected to generate 0.27 times more return on investment than Perimeter Medical. However, Canadian Natural Resources is 3.69 times less risky than Perimeter Medical. It trades about 0.07 of its potential returns per unit of risk. Perimeter Medical Imaging is currently generating about -0.08 per unit of risk. If you would invest  4,015  in Canadian Natural Resources on April 25, 2025 and sell it today you would earn a total of  253.00  from holding Canadian Natural Resources or generate 6.3% return on investment over 90 days.

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

Canadian Natural Resources  vs.  Perimeter Medical Imaging

Canadian Natural Res

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Natural Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Canadian Natural may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Perimeter Medical Imaging

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perimeter Medical Imaging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating 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 Natural and Perimeter Medical

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

The idea behind Canadian Natural Resources and Perimeter Medical Imaging 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.