Correlation Between PICTON Credit and Edgepoint Cdn

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

By analyzing existing cross correlation between PICTON Credit Opportunities and Edgepoint Cdn Growth, you can compare the effects of market volatilities on PICTON Credit and Edgepoint Cdn 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 PICTON Credit with a short position of Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICTON Credit and Edgepoint Cdn.

Diversification Opportunities for PICTON Credit and Edgepoint Cdn

0.92

Correlation Coefficient

PICTON Credit  Edgepoint Cdn

Almost no diversification

The 3 months correlation between PICTON and Edgepoint is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding PICTON Credit Opportunities and Edgepoint Cdn Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Cdn Growth and PICTON Credit 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 PICTON Credit Opportunities are associated (or correlated) with Edgepoint Cdn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Cdn Growth has no effect on the direction of PICTON Credit i.e., PICTON Credit and Edgepoint Cdn go up and down completely randomly.

Pair Corralation between PICTON Credit and Edgepoint Cdn

Assuming the 90 days trading horizon PICTON Credit is expected to generate 3.44 times less return on investment than Edgepoint Cdn. In addition to that, PICTON Credit is 1.05 times more volatile than Edgepoint Cdn Growth. It trades about 0.13 of its total potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.46 per unit of volatility. If you would invest  3,015  in Edgepoint Cdn Growth on April 22, 2025 and sell it today you would earn a total of  319.00  from holding Edgepoint Cdn Growth or generate 10.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

PICTON Credit Opportunities  vs.  Edgepoint Cdn Growth

PICTON Credit Opport

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PICTON Credit Opportunities are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, PICTON Credit is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Edgepoint Cdn Growth

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 36 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively unfluctuating forward-looking indicators, Edgepoint Cdn may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with PICTON Credit and Edgepoint Cdn

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

The idea behind PICTON Credit Opportunities and Edgepoint Cdn Growth 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.