Correlation Between Aimia and Kinaxis
Can any of the company-specific risk be diversified away by investing in both Aimia and Kinaxis 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 Kinaxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Kinaxis, you can compare the effects of market volatilities on Aimia and Kinaxis 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 Kinaxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Kinaxis.
Diversification Opportunities for Aimia and Kinaxis
Very good diversification
The 3 months correlation between Aimia and Kinaxis is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis 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 Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of Aimia i.e., Aimia and Kinaxis go up and down completely randomly.
Pair Corralation between Aimia and Kinaxis
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the Kinaxis. But the stock apears to be less risky and, when comparing its historical volatility, Aimia Inc is 1.12 times less risky than Kinaxis. The stock trades about -0.06 of its potential returns per unit of risk. The Kinaxis is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 15,700 in Kinaxis on August 30, 2024 and sell it today you would earn a total of 2,243 from holding Kinaxis or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Aimia Inc vs. Kinaxis
Performance |
| Timeline |
| Aimia Inc |
| Kinaxis |
Aimia and Kinaxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Kinaxis
The main advantage of trading using opposite Aimia and Kinaxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Kinaxis 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 Kinaxis will offset losses from the drop in Kinaxis' long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
| Kinaxis vs. Open Text Corp | Kinaxis vs. Enghouse Systems | Kinaxis vs. Docebo Inc | Kinaxis vs. Descartes Systems 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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