Correlation Between Air Canada and UNIV HEALTH
Can any of the company-specific risk be diversified away by investing in both Air Canada and UNIV 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 UNIV 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 UNIV HEALTH SERV B, you can compare the effects of market volatilities on Air Canada and UNIV 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 UNIV HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and UNIV HEALTH.
Diversification Opportunities for Air Canada and UNIV HEALTH
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Air and UNIV is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and UNIV HEALTH SERV B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIV HEALTH SERV 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 UNIV HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIV HEALTH SERV has no effect on the direction of Air Canada i.e., Air Canada and UNIV HEALTH go up and down completely randomly.
Pair Corralation between Air Canada and UNIV HEALTH
Assuming the 90 days trading horizon Air Canada is expected to generate 1.89 times more return on investment than UNIV HEALTH. However, Air Canada is 1.89 times more volatile than UNIV HEALTH SERV B. It trades about 0.33 of its potential returns per unit of risk. UNIV HEALTH SERV B is currently generating about 0.09 per unit of risk. If you would invest 1,267 in Air Canada on August 30, 2024 and sell it today you would earn a total of 385.00 from holding Air Canada or generate 30.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Canada vs. UNIV HEALTH SERV B
Performance |
| Timeline |
| Air Canada |
| UNIV HEALTH SERV |
Air Canada and UNIV HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Canada and UNIV HEALTH
The main advantage of trading using opposite Air Canada and UNIV HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, UNIV 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 UNIV HEALTH will offset losses from the drop in UNIV HEALTH's long position.| Air Canada vs. Take Two Interactive Software | Air Canada vs. PennyMac Mortgage Investment | Air Canada vs. WisdomTree Investments | Air Canada vs. Check Point Software |
| UNIV HEALTH vs. SPARTAN STORES | UNIV HEALTH vs. Evolution Mining Limited | UNIV HEALTH vs. Retail Estates NV | UNIV HEALTH vs. BJs Wholesale Club |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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