Correlation Between Aimia and Ensign Energy
Can any of the company-specific risk be diversified away by investing in both Aimia and Ensign Energy 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 Ensign Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Ensign Energy Services, you can compare the effects of market volatilities on Aimia and Ensign Energy 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 Ensign Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Ensign Energy.
Diversification Opportunities for Aimia and Ensign Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aimia and Ensign is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services 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 Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of Aimia i.e., Aimia and Ensign Energy go up and down completely randomly.
Pair Corralation between Aimia and Ensign Energy
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the Ensign Energy. But the stock apears to be less risky and, when comparing its historical volatility, Aimia Inc is 1.4 times less risky than Ensign Energy. The stock trades about -0.02 of its potential returns per unit of risk. The Ensign Energy Services is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Ensign Energy Services on August 28, 2024 and sell it today you would lose (36.00) from holding Ensign Energy Services or give up 10.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. Ensign Energy Services
Performance |
| Timeline |
| Aimia Inc |
| Ensign Energy Services |
Aimia and Ensign Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Ensign Energy
The main advantage of trading using opposite Aimia and Ensign Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Ensign Energy 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 Ensign Energy will offset losses from the drop in Ensign Energy'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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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