Correlation Between Aimia and Great West
Can any of the company-specific risk be diversified away by investing in both Aimia and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Great West 365, you can compare the effects of market volatilities on Aimia and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Great West.
Diversification Opportunities for Aimia and Great West
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aimia and Great is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Great West 365 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West 365 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West 365 has no effect on the direction of Aimia i.e., Aimia and Great West go up and down completely randomly.
Pair Corralation between Aimia and Great West
Assuming the 90 days trading horizon Aimia is expected to generate 1.31 times less return on investment than Great West. In addition to that, Aimia is 2.68 times more volatile than Great West 365. It trades about 0.04 of its total potential returns per unit of risk. Great West 365 is currently generating about 0.15 per unit of volatility. If you would invest 1,450 in Great West 365 on September 12, 2024 and sell it today you would earn a total of 101.00 from holding Great West 365 or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. Great West 365
Performance |
| Timeline |
| Aimia Inc |
| Great West 365 |
Aimia and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Great West
The main advantage of trading using opposite Aimia and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
| Great West vs. Manulife Financial Corp | Great West vs. Manulife Fin Non | Great West vs. Manulife Financial Corp | Great West vs. Manulife Financial Corp |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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