Correlation Between Autocanada and Aimia
Can any of the company-specific risk be diversified away by investing in both Autocanada and Aimia 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 Autocanada and Aimia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autocanada and Aimia Inc, you can compare the effects of market volatilities on Autocanada and Aimia 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 Autocanada with a short position of Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autocanada and Aimia.
Diversification Opportunities for Autocanada and Aimia
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Autocanada and Aimia is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Autocanada and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Autocanada 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 Autocanada are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Autocanada i.e., Autocanada and Aimia go up and down completely randomly.
Pair Corralation between Autocanada and Aimia
Assuming the 90 days trading horizon Autocanada is expected to generate 1.19 times more return on investment than Aimia. However, Autocanada is 1.19 times more volatile than Aimia Inc. It trades about 0.11 of its potential returns per unit of risk. Aimia Inc is currently generating about 0.06 per unit of risk. If you would invest 1,731 in Autocanada on October 22, 2024 and sell it today you would earn a total of 61.00 from holding Autocanada or generate 3.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autocanada vs. Aimia Inc
Performance |
| Timeline |
| Autocanada |
| Aimia Inc |
Autocanada and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autocanada and Aimia
The main advantage of trading using opposite Autocanada and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autocanada position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia's long position.| Autocanada vs. Martinrea International | Autocanada vs. Linamar | Autocanada vs. NFI Group | Autocanada vs. Element Fleet Management |
| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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