Correlation Between Aimia and Canadian Natural
Can any of the company-specific risk be diversified away by investing in both Aimia and Canadian Natural 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 Canadian Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Canadian Natural Resources, you can compare the effects of market volatilities on Aimia and Canadian Natural 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 Canadian Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Canadian Natural.
Diversification Opportunities for Aimia and Canadian Natural
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aimia and Canadian is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Canadian Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Natural Res 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 Canadian Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Natural Res has no effect on the direction of Aimia i.e., Aimia and Canadian Natural go up and down completely randomly.
Pair Corralation between Aimia and Canadian Natural
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the Canadian Natural. In addition to that, Aimia is 1.31 times more volatile than Canadian Natural Resources. It trades about -0.02 of its total potential returns per unit of risk. Canadian Natural Resources is currently generating about 0.05 per unit of volatility. If you would invest 3,488 in Canadian Natural Resources on September 3, 2024 and sell it today you would earn a total of 1,264 from holding Canadian Natural Resources or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. Canadian Natural Resources
Performance |
| Timeline |
| Aimia Inc |
| Canadian Natural Res |
Aimia and Canadian Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Canadian Natural
The main advantage of trading using opposite Aimia and Canadian Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Canadian Natural 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 Canadian Natural will offset losses from the drop in Canadian Natural's long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
| Canadian Natural vs. Suncor Energy | Canadian Natural vs. Cenovus Energy | Canadian Natural vs. TC Energy Corp | Canadian Natural vs. Enbridge |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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