Correlation Between Cineplex and Chorus Aviation
Can any of the company-specific risk be diversified away by investing in both Cineplex and Chorus Aviation 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 Cineplex and Chorus Aviation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cineplex and Chorus Aviation, you can compare the effects of market volatilities on Cineplex and Chorus Aviation 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 Cineplex with a short position of Chorus Aviation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cineplex and Chorus Aviation.
Diversification Opportunities for Cineplex and Chorus Aviation
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cineplex and Chorus is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cineplex and Chorus Aviation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chorus Aviation and Cineplex 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 Cineplex are associated (or correlated) with Chorus Aviation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chorus Aviation has no effect on the direction of Cineplex i.e., Cineplex and Chorus Aviation go up and down completely randomly.
Pair Corralation between Cineplex and Chorus Aviation
Assuming the 90 days trading horizon Cineplex is expected to under-perform the Chorus Aviation. But the stock apears to be less risky and, when comparing its historical volatility, Cineplex is 1.38 times less risky than Chorus Aviation. The stock trades about -0.07 of its potential returns per unit of risk. The Chorus Aviation is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 272.00 in Chorus Aviation on August 25, 2024 and sell it today you would earn a total of 53.00 from holding Chorus Aviation or generate 19.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cineplex vs. Chorus Aviation
Performance |
| Timeline |
| Cineplex |
| Chorus Aviation |
Cineplex and Chorus Aviation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cineplex and Chorus Aviation
The main advantage of trading using opposite Cineplex and Chorus Aviation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cineplex position performs unexpectedly, Chorus Aviation 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 Chorus Aviation will offset losses from the drop in Chorus Aviation's long position.| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
| Chorus Aviation vs. Cargojet | Chorus Aviation vs. Exchange Income | Chorus Aviation vs. Cineplex | Chorus Aviation vs. Transat AT |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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