Correlation Between Aimia and TECSYS
Can any of the company-specific risk be diversified away by investing in both Aimia and TECSYS 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 TECSYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and TECSYS Inc, you can compare the effects of market volatilities on Aimia and TECSYS 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 TECSYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and TECSYS.
Diversification Opportunities for Aimia and TECSYS
Average diversification
The 3 months correlation between Aimia and TECSYS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and TECSYS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TECSYS 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 TECSYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TECSYS Inc has no effect on the direction of Aimia i.e., Aimia and TECSYS go up and down completely randomly.
Pair Corralation between Aimia and TECSYS
Assuming the 90 days trading horizon Aimia Inc is expected to under-perform the TECSYS. But the stock apears to be less risky and, when comparing its historical volatility, Aimia Inc is 1.12 times less risky than TECSYS. The stock trades about -0.03 of its potential returns per unit of risk. The TECSYS Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,503 in TECSYS Inc on September 25, 2024 and sell it today you would earn a total of 2,069 from holding TECSYS Inc or generate 82.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aimia Inc vs. TECSYS Inc
Performance |
| Timeline |
| Aimia Inc |
| TECSYS Inc |
Aimia and TECSYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aimia and TECSYS
The main advantage of trading using opposite Aimia and TECSYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, TECSYS 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 TECSYS will offset losses from the drop in TECSYS's 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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