Correlation Between Air Canada and Champion Gaming
Can any of the company-specific risk be diversified away by investing in both Air Canada and Champion Gaming 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 Champion Gaming into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and Champion Gaming Group, you can compare the effects of market volatilities on Air Canada and Champion Gaming 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 Champion Gaming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and Champion Gaming.
Diversification Opportunities for Air Canada and Champion Gaming
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Champion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and Champion Gaming Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Gaming Group 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 Champion Gaming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Gaming Group has no effect on the direction of Air Canada i.e., Air Canada and Champion Gaming go up and down completely randomly.
Pair Corralation between Air Canada and Champion Gaming
Assuming the 90 days horizon Air Canada is expected to generate 0.18 times more return on investment than Champion Gaming. However, Air Canada is 5.6 times less risky than Champion Gaming. It trades about 0.08 of its potential returns per unit of risk. Champion Gaming Group is currently generating about -0.03 per unit of risk. If you would invest 1,796 in Air Canada on September 4, 2024 and sell it today you would earn a total of 694.00 from holding Air Canada or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Air Canada vs. Champion Gaming Group
Performance |
| Timeline |
| Air Canada |
| Champion Gaming Group |
Air Canada and Champion Gaming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and Champion Gaming
The main advantage of trading using opposite Air Canada and Champion Gaming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, Champion Gaming 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 Champion Gaming will offset losses from the drop in Champion Gaming's long position.The idea behind Air Canada and Champion Gaming Group 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.| Champion Gaming vs. Boat Rocker Media | Champion Gaming vs. Data Communications Management | Champion Gaming vs. Verizon Communications CDR | Champion Gaming 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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