Correlation Between Thomson Reuters and Strathcona Resources
Can any of the company-specific risk be diversified away by investing in both Thomson Reuters and Strathcona Resources 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 Thomson Reuters and Strathcona Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thomson Reuters Corp and Strathcona Resources, you can compare the effects of market volatilities on Thomson Reuters and Strathcona Resources 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 Thomson Reuters with a short position of Strathcona Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thomson Reuters and Strathcona Resources.
Diversification Opportunities for Thomson Reuters and Strathcona Resources
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thomson and Strathcona is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Thomson Reuters Corp and Strathcona Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strathcona Resources and Thomson Reuters 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 Thomson Reuters Corp are associated (or correlated) with Strathcona Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strathcona Resources has no effect on the direction of Thomson Reuters i.e., Thomson Reuters and Strathcona Resources go up and down completely randomly.
Pair Corralation between Thomson Reuters and Strathcona Resources
Assuming the 90 days trading horizon Thomson Reuters Corp is expected to under-perform the Strathcona Resources. But the stock apears to be less risky and, when comparing its historical volatility, Thomson Reuters Corp is 1.14 times less risky than Strathcona Resources. The stock trades about -0.22 of its potential returns per unit of risk. The Strathcona Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,818 in Strathcona Resources on August 29, 2025 and sell it today you would earn a total of 345.00 from holding Strathcona Resources or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thomson Reuters Corp vs. Strathcona Resources
Performance |
| Timeline |
| Thomson Reuters Corp |
| Strathcona Resources |
Thomson Reuters and Strathcona Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thomson Reuters and Strathcona Resources
The main advantage of trading using opposite Thomson Reuters and Strathcona Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thomson Reuters position performs unexpectedly, Strathcona Resources 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 Strathcona Resources will offset losses from the drop in Strathcona Resources' long position.| Thomson Reuters vs. Westshore Terminals Investment | Thomson Reuters vs. iA Financial | Thomson Reuters vs. North American Financial | Thomson Reuters vs. Dominion Lending Centres |
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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 the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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