Correlation Between Aecon and Cielo Waste
Can any of the company-specific risk be diversified away by investing in both Aecon and Cielo Waste 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 Cielo Waste into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecon Group and Cielo Waste Solutions, you can compare the effects of market volatilities on Aecon and Cielo Waste 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 Cielo Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and Cielo Waste.
Diversification Opportunities for Aecon and Cielo Waste
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aecon and Cielo is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and Cielo Waste Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cielo Waste Solutions 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 Cielo Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cielo Waste Solutions has no effect on the direction of Aecon i.e., Aecon and Cielo Waste go up and down completely randomly.
Pair Corralation between Aecon and Cielo Waste
Assuming the 90 days trading horizon Aecon Group is expected to generate 1.34 times more return on investment than Cielo Waste. However, Aecon is 1.34 times more volatile than Cielo Waste Solutions. It trades about 0.25 of its potential returns per unit of risk. Cielo Waste Solutions is currently generating about -0.46 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. Cielo Waste Solutions
Performance |
| Timeline |
| Aecon Group |
| Cielo Waste Solutions |
Aecon and Cielo Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aecon and Cielo Waste
The main advantage of trading using opposite Aecon and Cielo Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon position performs unexpectedly, Cielo Waste 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 Cielo Waste will offset losses from the drop in Cielo Waste's long position.| Aecon vs. Stantec | Aecon vs. Martinrea International | Aecon vs. Finning International | Aecon vs. WSP Global |
| Cielo Waste vs. Greenlane Renewables | Cielo Waste vs. Fobi AI | Cielo Waste vs. Neo Battery Materials | Cielo Waste vs. Solar Alliance Energy |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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