Correlation Between Air Canada and OPEN HOUSE
Can any of the company-specific risk be diversified away by investing in both Air Canada and OPEN HOUSE 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 OPEN HOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Canada and OPEN HOUSE GROUP, you can compare the effects of market volatilities on Air Canada and OPEN HOUSE 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 OPEN HOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and OPEN HOUSE.
Diversification Opportunities for Air Canada and OPEN HOUSE
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Air and OPEN is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and OPEN HOUSE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPEN HOUSE 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 OPEN HOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPEN HOUSE GROUP has no effect on the direction of Air Canada i.e., Air Canada and OPEN HOUSE go up and down completely randomly.
Pair Corralation between Air Canada and OPEN HOUSE
Assuming the 90 days trading horizon Air Canada is expected to generate 1.13 times less return on investment than OPEN HOUSE. In addition to that, Air Canada is 1.01 times more volatile than OPEN HOUSE GROUP. It trades about 0.06 of its total potential returns per unit of risk. OPEN HOUSE GROUP is currently generating about 0.06 per unit of volatility. If you would invest 2,600 in OPEN HOUSE GROUP on August 25, 2024 and sell it today you would earn a total of 860.00 from holding OPEN HOUSE GROUP or generate 33.08% 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. OPEN HOUSE GROUP
Performance |
| Timeline |
| Air Canada |
| OPEN HOUSE GROUP |
Air Canada and OPEN HOUSE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and OPEN HOUSE
The main advantage of trading using opposite Air Canada and OPEN HOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, OPEN HOUSE 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 OPEN HOUSE will offset losses from the drop in OPEN HOUSE's long position.| Air Canada vs. CI GAMES SA | Air Canada vs. TSOGO SUN GAMING | Air Canada vs. Boyd Gaming | Air Canada vs. PENN NATL GAMING |
| OPEN HOUSE vs. Superior Plus Corp | OPEN HOUSE vs. NMI Holdings | OPEN HOUSE vs. Origin Agritech | OPEN HOUSE vs. SIVERS SEMICONDUCTORS AB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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