Correlation Between Aimia and National Bank
Can any of the company-specific risk be diversified away by investing in both Aimia and National Bank 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 National Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and National Bank of, you can compare the effects of market volatilities on Aimia and National Bank 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 National Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and National Bank.
Diversification Opportunities for Aimia and National Bank
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aimia and National is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and National Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Bank 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 National Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Bank has no effect on the direction of Aimia i.e., Aimia and National Bank go up and down completely randomly.
Pair Corralation between Aimia and National Bank
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the National Bank. In addition to that, Aimia is 3.58 times more volatile than National Bank of. It trades about -0.02 of its total potential returns per unit of risk. National Bank of is currently generating about 0.13 per unit of volatility. If you would invest 1,920 in National Bank of on August 26, 2024 and sell it today you would earn a total of 674.00 from holding National Bank of or generate 35.1% 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. National Bank of
Performance |
| Timeline |
| Aimia Inc |
| National Bank |
Aimia and National Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and National Bank
The main advantage of trading using opposite Aimia and National Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, National Bank 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 National Bank will offset losses from the drop in National Bank's long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
| National Bank vs. Partners Value Investments | National Bank vs. CNJ Capital Investments | National Bank vs. Medical Facilities | National Bank vs. Rogers Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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