Correlation Between Roots and Reitmans Canada

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

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

Diversification Opportunities for Roots and Reitmans Canada

0.07

Correlation Coefficient

Roots  Reitmans Canada

Significant diversification

The 3 months correlation between Roots and Reitmans is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Roots and Reitmans Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitmans Canada and Roots 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 Roots are associated (or correlated) with Reitmans Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitmans Canada has no effect on the direction of Roots i.e., Roots and Reitmans Canada go up and down completely randomly.

Pair Corralation between Roots and Reitmans Canada

Assuming the 90 days horizon Roots is expected to generate 0.63 times more return on investment than Reitmans Canada. However, Roots is 1.59 times less risky than Reitmans Canada. It trades about 0.09 of its potential returns per unit of risk. Reitmans Canada is currently generating about -0.07 per unit of risk. If you would invest  204.00  in Roots on May 6, 2025 and sell it today you would earn a total of  26.00  from holding Roots or generate 12.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Roots  vs.  Reitmans Canada

Roots

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Roots are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Roots reported solid returns over the last few months and may actually be approaching a breakup point.

Reitmans Canada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reitmans Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Roots and Reitmans Canada

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

The idea behind Roots and Reitmans Canada 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.