Correlation Between Aimia and Paramount Resources
Can any of the company-specific risk be diversified away by investing in both Aimia and Paramount Resources 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 Paramount Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Paramount Resources, you can compare the effects of market volatilities on Aimia and Paramount Resources 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 Paramount Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Paramount Resources.
Diversification Opportunities for Aimia and Paramount Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Aimia and Paramount is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Paramount Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paramount Resources 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 Paramount Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paramount Resources has no effect on the direction of Aimia i.e., Aimia and Paramount Resources go up and down completely randomly.
Pair Corralation between Aimia and Paramount Resources
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the Paramount Resources. But the stock apears to be less risky and, when comparing its historical volatility, Aimia Inc is 1.11 times less risky than Paramount Resources. The stock trades about -0.05 of its potential returns per unit of risk. The Paramount Resources is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 3,016 in Paramount Resources on September 3, 2024 and sell it today you would earn a total of 118.00 from holding Paramount Resources or generate 3.91% 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. Paramount Resources
Performance |
| Timeline |
| Aimia Inc |
| Paramount Resources |
Aimia and Paramount Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Paramount Resources
The main advantage of trading using opposite Aimia and Paramount Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Paramount Resources 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 Paramount Resources will offset losses from the drop in Paramount Resources' long position.| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
| Paramount Resources vs. Metalero Mining Corp | Paramount Resources vs. Quipt Home Medical | Paramount Resources vs. Profound Medical Corp | Paramount Resources vs. Medical Facilities |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |