Correlation Between Air Canada and ExGen Resources
Can any of the company-specific risk be diversified away by investing in both Air Canada and ExGen 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 ExGen 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 ExGen Resources, you can compare the effects of market volatilities on Air Canada and ExGen 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 ExGen Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and ExGen Resources.
Diversification Opportunities for Air Canada and ExGen Resources
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and ExGen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and ExGen Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ExGen 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 ExGen Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ExGen Resources has no effect on the direction of Air Canada i.e., Air Canada and ExGen Resources go up and down completely randomly.
Pair Corralation between Air Canada and ExGen Resources
Assuming the 90 days horizon Air Canada is expected to generate 0.36 times more return on investment than ExGen Resources. However, Air Canada is 2.78 times less risky than ExGen Resources. It trades about 0.33 of its potential returns per unit of risk. ExGen Resources is currently generating about 0.06 per unit of risk. 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Canada vs. ExGen Resources
Performance |
| Timeline |
| Air Canada |
| ExGen Resources |
Air Canada and ExGen Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and ExGen Resources
The main advantage of trading using opposite Air Canada and ExGen Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, ExGen 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 ExGen Resources will offset losses from the drop in ExGen Resources' long position.The idea behind Air Canada and ExGen 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.| ExGen Resources vs. Lion One Metals | ExGen Resources vs. Marimaca Copper Corp | ExGen Resources vs. Questor Technology | ExGen Resources vs. Rogers Communications |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |