Correlation Between Canadian National and Boson Protocol

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Can any of the company-specific risk be diversified away by investing in both Canadian National and Boson Protocol 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 Canadian National and Boson Protocol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian National Railway and Boson Protocol, you can compare the effects of market volatilities on Canadian National and Boson Protocol 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 Canadian National with a short position of Boson Protocol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian National and Boson Protocol.

Diversification Opportunities for Canadian National and Boson Protocol

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Canadian and Boson is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Canadian National Railway and Boson Protocol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boson Protocol and Canadian National 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 Canadian National Railway are associated (or correlated) with Boson Protocol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boson Protocol has no effect on the direction of Canadian National i.e., Canadian National and Boson Protocol go up and down completely randomly.

Pair Corralation between Canadian National and Boson Protocol

Considering the 90-day investment horizon Canadian National Railway is expected to under-perform the Boson Protocol. But the stock apears to be less risky and, when comparing its historical volatility, Canadian National Railway is 4.69 times less risky than Boson Protocol. The stock trades about -0.23 of its potential returns per unit of risk. The Boson Protocol is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  27.00  in Boson Protocol on June 28, 2022 and sell it today you would lose (3.00)  from holding Boson Protocol or give up 11.11% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy85.71%
ValuesDaily Returns

Canadian National Railway  vs.  Boson Protocol

 Performance (%) 
       Timeline  
Canadian National Railway 
Canadian Performance
0 of 100
Over the last 90 days Canadian National Railway has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Canadian National is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Canadian Price Channel

Boson Protocol 
Boson Performance
0 of 100
Over the last 90 days Boson Protocol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Boson Protocol sustained solid returns over the last few months and may actually be approaching a breakup point.

Canadian National and Boson Protocol Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Canadian National and Boson Protocol

The main advantage of trading using opposite Canadian National and Boson Protocol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian National position performs unexpectedly, Boson Protocol 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 Boson Protocol will offset losses from the drop in Boson Protocol's long position.
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The idea behind Canadian National Railway and Boson Protocol 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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Check out your portfolio center. 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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