Correlation Between Firm Capital and Canadian Net

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

By analyzing existing cross correlation between Firm Capital Mortgage and Canadian Net Real, you can compare the effects of market volatilities on Firm Capital and Canadian Net 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 Firm Capital with a short position of Canadian Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firm Capital and Canadian Net.

Diversification Opportunities for Firm Capital and Canadian Net

0.0

Correlation Coefficient

Firm Capital  Canadian Net

Pay attention - limited upside

The 3 months correlation between Firm and Canadian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Firm Capital Mortgage and Canadian Net Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Net Real and Firm Capital 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 Firm Capital Mortgage are associated (or correlated) with Canadian Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Net Real has no effect on the direction of Firm Capital i.e., Firm Capital and Canadian Net go up and down completely randomly.

Pair Corralation between Firm Capital and Canadian Net

If you would invest  1,141  in Firm Capital Mortgage on April 21, 2025 and sell it today you would earn a total of  93.00  from holding Firm Capital Mortgage or generate 8.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Firm Capital Mortgage  vs.  Canadian Net Real

Firm Capital Mortgage

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Firm Capital Mortgage are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Firm Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Canadian Net Real

Risk-Adjusted Performance

OK

Over the last 90 days Canadian Net Real has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Canadian Net is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Firm Capital and Canadian Net

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

The idea behind Firm Capital Mortgage and Canadian Net Real 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.