Correlation Between Aecon and Corus Entertainment
Can any of the company-specific risk be diversified away by investing in both Aecon and Corus Entertainment 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 Aecon and Corus Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecon Group and Corus Entertainment, you can compare the effects of market volatilities on Aecon and Corus Entertainment 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 Aecon with a short position of Corus Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and Corus Entertainment.
Diversification Opportunities for Aecon and Corus Entertainment
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Aecon and Corus is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment and Aecon 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 Aecon Group are associated (or correlated) with Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Aecon i.e., Aecon and Corus Entertainment go up and down completely randomly.
Pair Corralation between Aecon and Corus Entertainment
Assuming the 90 days trading horizon Aecon Group is expected to generate 0.8 times more return on investment than Corus Entertainment. However, Aecon Group is 1.26 times less risky than Corus Entertainment. It trades about 0.25 of its potential returns per unit of risk. Corus Entertainment is currently generating about 0.03 per unit of risk. If you would invest 2,319 in Aecon Group on September 1, 2024 and sell it today you would earn a total of 559.00 from holding Aecon Group or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aecon Group vs. Corus Entertainment
Performance |
| Timeline |
| Aecon Group |
| Corus Entertainment |
Aecon and Corus Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecon and Corus Entertainment
The main advantage of trading using opposite Aecon and Corus Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon position performs unexpectedly, Corus Entertainment 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 Corus Entertainment will offset losses from the drop in Corus Entertainment's long position.| Aecon vs. Stantec | Aecon vs. Martinrea International | Aecon vs. Finning International | Aecon vs. WSP Global |
| Corus Entertainment vs. VerticalScope Holdings | Corus Entertainment vs. WildBrain | Corus Entertainment vs. iShares Canadian HYBrid | Corus Entertainment vs. Altagas Cum Red |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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