Correlation Between Aimia and PowerBand Solutions
Can any of the company-specific risk be diversified away by investing in both Aimia and PowerBand Solutions 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 PowerBand Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and PowerBand Solutions, you can compare the effects of market volatilities on Aimia and PowerBand Solutions 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 PowerBand Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and PowerBand Solutions.
Diversification Opportunities for Aimia and PowerBand Solutions
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aimia and PowerBand is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and PowerBand Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PowerBand Solutions 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 PowerBand Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PowerBand Solutions has no effect on the direction of Aimia i.e., Aimia and PowerBand Solutions go up and down completely randomly.
Pair Corralation between Aimia and PowerBand Solutions
Assuming the 90 days trading horizon Aimia Inc is expected to generate 0.3 times more return on investment than PowerBand Solutions. However, Aimia Inc is 3.33 times less risky than PowerBand Solutions. It trades about 0.01 of its potential returns per unit of risk. PowerBand Solutions is currently generating about -0.15 per unit of risk. If you would invest 250.00 in Aimia Inc on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Aimia Inc or generate 0.0% 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. PowerBand Solutions
Performance |
| Timeline |
| Aimia Inc |
| PowerBand Solutions |
Aimia and PowerBand Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and PowerBand Solutions
The main advantage of trading using opposite Aimia and PowerBand Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, PowerBand Solutions 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 PowerBand Solutions will offset losses from the drop in PowerBand Solutions' long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
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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