Correlation Between Aimia and CHEVRON CDR
Can any of the company-specific risk be diversified away by investing in both Aimia and CHEVRON CDR 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 Aimia and CHEVRON CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and CHEVRON CDR, you can compare the effects of market volatilities on Aimia and CHEVRON CDR 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 Aimia with a short position of CHEVRON CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and CHEVRON CDR.
Diversification Opportunities for Aimia and CHEVRON CDR
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aimia and CHEVRON is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and CHEVRON CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEVRON CDR and Aimia 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 Aimia Inc are associated (or correlated) with CHEVRON CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEVRON CDR has no effect on the direction of Aimia i.e., Aimia and CHEVRON CDR go up and down completely randomly.
Pair Corralation between Aimia and CHEVRON CDR
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the CHEVRON CDR. In addition to that, Aimia is 1.64 times more volatile than CHEVRON CDR. It trades about -0.02 of its total potential returns per unit of risk. CHEVRON CDR is currently generating about 0.05 per unit of volatility. If you would invest 1,873 in CHEVRON CDR on September 4, 2024 and sell it today you would earn a total of 300.00 from holding CHEVRON CDR or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Aimia Inc vs. CHEVRON CDR
Performance |
| Timeline |
| Aimia Inc |
| CHEVRON CDR |
Aimia and CHEVRON CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and CHEVRON CDR
The main advantage of trading using opposite Aimia and CHEVRON CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, CHEVRON CDR 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 CHEVRON CDR will offset losses from the drop in CHEVRON CDR's long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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