Correlation Between Canadian National and PAMT P
Can any of the company-specific risk be diversified away by investing in both Canadian National and PAMT P 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 PAMT P 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 PAMT P, you can compare the effects of market volatilities on Canadian National and PAMT P 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 PAMT P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian National and PAMT P.
Diversification Opportunities for Canadian National and PAMT P
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Canadian and PAMT is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Canadian National Railway and PAMT P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PAMT P 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 PAMT P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PAMT P has no effect on the direction of Canadian National i.e., Canadian National and PAMT P go up and down completely randomly.
Pair Corralation between Canadian National and PAMT P
Considering the 90-day investment horizon Canadian National Railway is expected to under-perform the PAMT P. But the stock apears to be less risky and, when comparing its historical volatility, Canadian National Railway is 2.16 times less risky than PAMT P. The stock trades about -0.04 of its potential returns per unit of risk. The PAMT P is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,311 in PAMT P on April 16, 2025 and sell it today you would earn a total of 2.00 from holding PAMT P or generate 0.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian National Railway vs. PAMT P
Performance |
| Timeline |
| Canadian National Railway |
| PAMT P |
Canadian National and PAMT P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian National and PAMT P
The main advantage of trading using opposite Canadian National and PAMT P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian National position performs unexpectedly, PAMT P 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 PAMT P will offset losses from the drop in PAMT P's long position.| Canadian National vs. Canadian Pacific Railway | Canadian National vs. CSX Corporation | Canadian National vs. Ecolab Inc | Canadian National vs. Norfolk Southern |
| PAMT P vs. CarsalesCom Ltd ADR | PAMT P vs. Alta Equipment Group | PAMT P vs. Integral Ad Science | PAMT P vs. McGrath RentCorp |
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 the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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