Correlation Between Air Canada and Altair Resources
Can any of the company-specific risk be diversified away by investing in both Air Canada and Altair 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 Air Canada and Altair Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and Altair Resources, you can compare the effects of market volatilities on Air Canada and Altair 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 Air Canada with a short position of Altair Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and Altair Resources.
Diversification Opportunities for Air Canada and Altair Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Altair is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and Altair Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altair Resources and Air Canada 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 Air Canada are associated (or correlated) with Altair Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altair Resources has no effect on the direction of Air Canada i.e., Air Canada and Altair Resources go up and down completely randomly.
Pair Corralation between Air Canada and Altair Resources
If you would invest 1,521 in Air Canada on September 2, 2024 and sell it today you would earn a total of 975.00 from holding Air Canada or generate 64.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Air Canada vs. Altair Resources
Performance |
| Timeline |
| Air Canada |
| Altair Resources |
Air Canada and Altair Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and Altair Resources
The main advantage of trading using opposite Air Canada and Altair Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, Altair 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 Altair Resources will offset losses from the drop in Altair Resources' long position.The idea behind Air Canada and Altair Resources 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.| Altair Resources vs. Kiplin Metals | Altair Resources vs. Noram Lithium Corp | Altair Resources vs. Minnova Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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