Correlation Between Aecon and SNC Lavalin
Can any of the company-specific risk be diversified away by investing in both Aecon and SNC Lavalin 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 Aecon and SNC Lavalin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecon Group and SNC Lavalin Group, you can compare the effects of market volatilities on Aecon and SNC Lavalin 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 Aecon with a short position of SNC Lavalin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and SNC Lavalin.
Diversification Opportunities for Aecon and SNC Lavalin
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aecon and SNC is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and SNC Lavalin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Lavalin Group and Aecon 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 Aecon Group are associated (or correlated) with SNC Lavalin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Lavalin Group has no effect on the direction of Aecon i.e., Aecon and SNC Lavalin go up and down completely randomly.
Pair Corralation between Aecon and SNC Lavalin
Assuming the 90 days horizon Aecon Group is expected to generate 0.99 times more return on investment than SNC Lavalin. However, Aecon Group is 1.01 times less risky than SNC Lavalin. It trades about 0.26 of its potential returns per unit of risk. SNC Lavalin Group is currently generating about 0.24 per unit of risk. If you would invest 1,544 in Aecon Group on August 28, 2024 and sell it today you would earn a total of 553.00 from holding Aecon Group or generate 35.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aecon Group vs. SNC Lavalin Group
Performance |
| Timeline |
| Aecon Group |
| SNC Lavalin Group |
Aecon and SNC Lavalin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecon and SNC Lavalin
The main advantage of trading using opposite Aecon and SNC Lavalin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon position performs unexpectedly, SNC Lavalin 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 SNC Lavalin will offset losses from the drop in SNC Lavalin's long position.| Aecon vs. Element Solutions | Aecon vs. Orion Engineered Carbons | Aecon vs. Minerals Technologies | Aecon vs. Ingevity Corp |
| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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