Correlation Between Canadian Pacific and Blade Air
Can any of the company-specific risk be diversified away by investing in both Canadian Pacific and Blade Air 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 Canadian Pacific and Blade Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canadian Pacific Railway and Blade Air Mobility, you can compare the effects of market volatilities on Canadian Pacific and Blade Air 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 Canadian Pacific with a short position of Blade Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Pacific and Blade Air.
Diversification Opportunities for Canadian Pacific and Blade Air
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Canadian and Blade is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Pacific Railway and Blade Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blade Air Mobility and Canadian Pacific 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 Canadian Pacific Railway are associated (or correlated) with Blade Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blade Air Mobility has no effect on the direction of Canadian Pacific i.e., Canadian Pacific and Blade Air go up and down completely randomly.
Pair Corralation between Canadian Pacific and Blade Air
Allowing for the 90-day total investment horizon Canadian Pacific Railway is expected to under-perform the Blade Air. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Pacific Railway is 3.26 times less risky than Blade Air. The stock trades about -0.01 of its potential returns per unit of risk. The Blade Air Mobility is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 298.00 in Blade Air Mobility on August 30, 2024 and sell it today you would earn a total of 141.00 from holding Blade Air Mobility or generate 47.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canadian Pacific Railway vs. Blade Air Mobility
Performance |
| Timeline |
| Canadian Pacific Railway |
| Blade Air Mobility |
Canadian Pacific and Blade Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canadian Pacific and Blade Air
The main advantage of trading using opposite Canadian Pacific and Blade Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canadian Pacific position performs unexpectedly, Blade Air 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 Blade Air will offset losses from the drop in Blade Air's long position.| Canadian Pacific vs. Union Pacific | Canadian Pacific vs. CSX Corporation | Canadian Pacific vs. Westinghouse Air Brake | Canadian Pacific vs. Canadian National Railway |
| Blade Air vs. Grupo Aeroportuario del | Blade Air vs. Auckland International Airport | Blade Air vs. Aeroports de Paris | Blade Air vs. Aena SME SA |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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