Correlation Between Canadian North and Taiga Building

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

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

Diversification Opportunities for Canadian North and Taiga Building

-0.58

Correlation Coefficient

Canadian North  Taiga Building

Excellent diversification

The 3 months correlation between Canadian and Taiga is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Canadian North Resources and Taiga Building Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiga Building Products and Canadian North 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 North Resources are associated (or correlated) with Taiga Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiga Building Products has no effect on the direction of Canadian North i.e., Canadian North and Taiga Building go up and down completely randomly.

Pair Corralation between Canadian North and Taiga Building

Assuming the 90 days trading horizon Canadian North Resources is expected to under-perform the Taiga Building. But the stock apears to be less risky and, when comparing its historical volatility, Canadian North Resources is 1.39 times less risky than Taiga Building. The stock trades about -0.1 of its potential returns per unit of risk. The Taiga Building Products is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  166.00  in Taiga Building Products on April 25, 2025 and sell it today you would earn a total of  169.00  from holding Taiga Building Products or generate 101.81% return on investment over 90 days.

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

Canadian North Resources  vs.  Taiga Building Products

Canadian North Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canadian North Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak 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.

Taiga Building Products

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Taiga Building Products are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Taiga Building displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canadian North and Taiga Building

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

The idea behind Canadian North Resources and Taiga Building Products 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.