Correlation Between Cineplex and Transat AT
Can any of the company-specific risk be diversified away by investing in both Cineplex and Transat AT 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 Transat AT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cineplex and Transat AT, you can compare the effects of market volatilities on Cineplex and Transat AT 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 Transat AT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cineplex and Transat AT.
Diversification Opportunities for Cineplex and Transat AT
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cineplex and Transat is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cineplex and Transat AT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transat AT 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 Transat AT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transat AT has no effect on the direction of Cineplex i.e., Cineplex and Transat AT go up and down completely randomly.
Pair Corralation between Cineplex and Transat AT
Assuming the 90 days trading horizon Cineplex is expected to generate 1.26 times more return on investment than Transat AT. However, Cineplex is 1.26 times more volatile than Transat AT. It trades about 0.03 of its potential returns per unit of risk. Transat AT is currently generating about -0.02 per unit of risk. If you would invest 1,037 in Cineplex on August 29, 2024 and sell it today you would earn a total of 9.00 from holding Cineplex or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cineplex vs. Transat AT
Performance |
| Timeline |
| Cineplex |
| Transat AT |
Cineplex and Transat AT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cineplex and Transat AT
The main advantage of trading using opposite Cineplex and Transat AT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cineplex position performs unexpectedly, Transat AT 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 Transat AT will offset losses from the drop in Transat AT's long position.| Cineplex vs. Air Canada | Cineplex vs. BlackBerry | Cineplex vs. Suncor Energy | Cineplex vs. Drone Delivery Canada |
| Transat AT vs. Chorus Aviation | Transat AT vs. Cineplex | Transat AT vs. Lion Electric Corp | Transat AT vs. Air Canada |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stocks Directory Find actively traded stocks across global markets |