Correlation Between Signal Advance and Linamar

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

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

Diversification Opportunities for Signal Advance and Linamar

0.0

Correlation Coefficient

Signal Advance  Linamar

Pay attention - limited upside

The 3 months correlation between Signal and Linamar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Signal Advance and Linamar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linamar and Signal Advance 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 Signal Advance are associated (or correlated) with Linamar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linamar has no effect on the direction of Signal Advance i.e., Signal Advance and Linamar go up and down completely randomly.

Pair Corralation between Signal Advance and Linamar

Given the investment horizon of 90 days Signal Advance is expected to generate 8.74 times more return on investment than Linamar. However, Signal Advance is 8.74 times more volatile than Linamar. It trades about 0.06 of its potential returns per unit of risk. Linamar is currently generating about 0.22 per unit of risk. If you would invest  21.00  in Signal Advance on May 7, 2025 and sell it today you would lose (2.00) from holding Signal Advance or give up 9.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Signal Advance  vs.  Linamar

Signal Advance

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Signal Advance are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical and fundamental indicators, Signal Advance disclosed solid returns over the last few months and may actually be approaching a breakup point.

Linamar

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Linamar are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Linamar reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Signal Advance and Linamar

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

The idea behind Signal Advance and Linamar 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.