Correlation Between Nutrien and Alimentation Couchen

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

By analyzing existing cross correlation between Nutrien and Alimentation Couchen Tard, you can compare the effects of market volatilities on Nutrien and Alimentation Couchen 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 Nutrien with a short position of Alimentation Couchen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nutrien and Alimentation Couchen.

Diversification Opportunities for Nutrien and Alimentation Couchen

-0.1

Correlation Coefficient

Nutrien  Alimentation Couchen

Good diversification

The 3 months correlation between Nutrien and Alimentation is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nutrien and Alimentation Couchen Tard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alimentation Couchen Tard and Nutrien 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 Nutrien are associated (or correlated) with Alimentation Couchen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alimentation Couchen Tard has no effect on the direction of Nutrien i.e., Nutrien and Alimentation Couchen go up and down completely randomly.

Pair Corralation between Nutrien and Alimentation Couchen

Assuming the 90 days trading horizon Nutrien is expected to generate 0.79 times more return on investment than Alimentation Couchen. However, Nutrien is 1.27 times less risky than Alimentation Couchen. It trades about 0.13 of its potential returns per unit of risk. Alimentation Couchen Tard is currently generating about 0.05 per unit of risk. If you would invest  7,320  in Nutrien on April 23, 2025 and sell it today you would earn a total of  851.00  from holding Nutrien or generate 11.63% return on investment over 90 days.

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

Nutrien  vs.  Alimentation Couchen Tard

Nutrien

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nutrien are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Nutrien may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Alimentation Couchen Tard

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Alimentation Couchen Tard are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Alimentation Couchen is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nutrien and Alimentation Couchen

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

The idea behind Nutrien and Alimentation Couchen Tard 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.