Correlation Between Air Canada and NeuPath Health
Can any of the company-specific risk be diversified away by investing in both Air Canada and NeuPath Health 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 NeuPath Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and NeuPath Health, you can compare the effects of market volatilities on Air Canada and NeuPath Health 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 NeuPath Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and NeuPath Health.
Diversification Opportunities for Air Canada and NeuPath Health
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and NeuPath is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and NeuPath Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeuPath Health 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 NeuPath Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeuPath Health has no effect on the direction of Air Canada i.e., Air Canada and NeuPath Health go up and down completely randomly.
Pair Corralation between Air Canada and NeuPath Health
Assuming the 90 days horizon Air Canada is expected to generate 0.96 times more return on investment than NeuPath Health. However, Air Canada is 1.04 times less risky than NeuPath Health. It trades about 0.4 of its potential returns per unit of risk. NeuPath Health is currently generating about 0.1 per unit of risk. If you would invest 1,887 in Air Canada on September 1, 2024 and sell it today you would earn a total of 609.00 from holding Air Canada or generate 32.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Canada vs. NeuPath Health
Performance |
| Timeline |
| Air Canada |
| NeuPath Health |
Air Canada and NeuPath Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and NeuPath Health
The main advantage of trading using opposite Air Canada and NeuPath Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, NeuPath Health 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 NeuPath Health will offset losses from the drop in NeuPath Health's long position.| Air Canada vs. Suncor Energy | Air Canada vs. Enbridge | Air Canada vs. Toronto Dominion Bank | Air Canada vs. iShares Canadian HYBrid |
| NeuPath Health vs. Reliq Health Technologies | NeuPath Health vs. Rubicon Organics | NeuPath Health vs. DRI Healthcare Trust | NeuPath Health vs. High Liner Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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