Correlation Between Air Canada and Aya Gold
Can any of the company-specific risk be diversified away by investing in both Air Canada and Aya Gold 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 Aya Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and Aya Gold Silver, you can compare the effects of market volatilities on Air Canada and Aya Gold 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 Aya Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and Aya Gold.
Diversification Opportunities for Air Canada and Aya Gold
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and Aya is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Air Canada i.e., Air Canada and Aya Gold go up and down completely randomly.
Pair Corralation between Air Canada and Aya Gold
Assuming the 90 days horizon Air Canada is expected to generate 0.58 times more return on investment than Aya Gold. However, Air Canada is 1.73 times less risky than Aya Gold. It trades about 0.16 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.0 per unit of risk. If you would invest 1,716 in Air Canada on September 12, 2024 and sell it today you would earn a total of 829.00 from holding Air Canada or generate 48.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Air Canada vs. Aya Gold Silver
Performance |
Timeline |
Air Canada |
Aya Gold Silver |
Air Canada and Aya Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Canada and Aya Gold
The main advantage of trading using opposite Air Canada and Aya Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, Aya Gold 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 Aya Gold will offset losses from the drop in Aya Gold's long position.The idea behind Air Canada and Aya Gold Silver 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.Aya Gold vs. Ressources Minieres Radisson | Aya Gold vs. Galantas Gold Corp | Aya Gold vs. Red Pine Exploration | Aya Gold vs. Kore Mining |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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