Correlation Between Aimia and Tucows
Can any of the company-specific risk be diversified away by investing in both Aimia and Tucows 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 Tucows into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Tucows Inc, you can compare the effects of market volatilities on Aimia and Tucows 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 Tucows. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Tucows.
Diversification Opportunities for Aimia and Tucows
Weak diversification
The 3 months correlation between Aimia and Tucows is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Tucows Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tucows Inc 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 Tucows. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tucows Inc has no effect on the direction of Aimia i.e., Aimia and Tucows go up and down completely randomly.
Pair Corralation between Aimia and Tucows
Assuming the 90 days trading horizon Aimia Inc is expected to generate 0.64 times more return on investment than Tucows. However, Aimia Inc is 1.57 times less risky than Tucows. It trades about -0.04 of its potential returns per unit of risk. Tucows Inc is currently generating about -0.07 per unit of risk. If you would invest 254.00 in Aimia Inc on August 29, 2024 and sell it today you would lose (14.00) from holding Aimia Inc or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. Tucows Inc
Performance |
| Timeline |
| Aimia Inc |
| Tucows Inc |
Aimia and Tucows Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and Tucows
The main advantage of trading using opposite Aimia and Tucows positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Tucows 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 Tucows will offset losses from the drop in Tucows' long position.The idea behind Aimia Inc and Tucows Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tucows vs. TECSYS Inc | Tucows vs. Descartes Systems Group | Tucows vs. Enghouse Systems | Tucows vs. Evertz Technologies Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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