Correlation Between BetaPro Canadian and BetaPro Natural

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

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

Diversification Opportunities for BetaPro Canadian and BetaPro Natural

-0.33

Correlation Coefficient

BetaPro Canadian  BetaPro Natural

Very good diversification

The 3 months correlation between BetaPro and BetaPro is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and BetaPro Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BetaPro Natural Gas and BetaPro Canadian 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 BetaPro Canadian Gold are associated (or correlated) with BetaPro Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BetaPro Natural Gas has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and BetaPro Natural go up and down completely randomly.

Pair Corralation between BetaPro Canadian and BetaPro Natural

Assuming the 90 days trading horizon BetaPro Canadian is expected to generate 1.58 times less return on investment than BetaPro Natural. But when comparing it to its historical volatility, BetaPro Canadian Gold is 1.35 times less risky than BetaPro Natural. It trades about 0.02 of its potential returns per unit of risk. BetaPro Natural Gas is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,035  in BetaPro Natural Gas on April 22, 2025 and sell it today you would lose (104.00) from holding BetaPro Natural Gas or give up 3.43% of portfolio value over 90 days.

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

BetaPro Canadian Gold  vs.  BetaPro Natural Gas

BetaPro Canadian Gold

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro Canadian Gold are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, BetaPro Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

BetaPro Natural Gas

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BetaPro Natural Gas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BetaPro Natural may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BetaPro Canadian and BetaPro Natural

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

The idea behind BetaPro Canadian Gold and BetaPro Natural Gas 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 Stocks Directory module to find actively traded stocks across global markets.