Correlation Between Guru Organic and Canadian General

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

By analyzing existing cross correlation between Guru Organic Energy and Canadian General Investments, you can compare the effects of market volatilities on Guru Organic and Canadian General 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 Guru Organic with a short position of Canadian General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guru Organic and Canadian General.

Diversification Opportunities for Guru Organic and Canadian General

0.34

Correlation Coefficient

Guru Organic  Canadian General

Weak diversification

The 3 months correlation between Guru and Canadian is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guru Organic Energy and Canadian General Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian General Inv and Guru Organic 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 Guru Organic Energy are associated (or correlated) with Canadian General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian General Inv has no effect on the direction of Guru Organic i.e., Guru Organic and Canadian General go up and down completely randomly.

Pair Corralation between Guru Organic and Canadian General

Assuming the 90 days trading horizon Guru Organic is expected to generate 1.42 times less return on investment than Canadian General. In addition to that, Guru Organic is 2.97 times more volatile than Canadian General Investments. It trades about 0.07 of its total potential returns per unit of risk. Canadian General Investments is currently generating about 0.29 per unit of volatility. If you would invest  3,326  in Canadian General Investments on April 22, 2025 and sell it today you would earn a total of  749.00  from holding Canadian General Investments or generate 22.52% return on investment over 90 days.

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

Guru Organic Energy  vs.  Canadian General Investments

Guru Organic Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guru Organic Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guru Organic displayed solid returns over the last few months and may actually be approaching a breakup point.

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 23 (%) 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.

Pair Trading with Guru Organic and Canadian General

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

The idea behind Guru Organic Energy and Canadian General Investments 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.