Correlation Between OAKTRSPECLENDNEW and Air Canada
Can any of the company-specific risk be diversified away by investing in both OAKTRSPECLENDNEW and Air Canada 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 OAKTRSPECLENDNEW and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAKTRSPECLENDNEW and Air Canada, you can compare the effects of market volatilities on OAKTRSPECLENDNEW and Air Canada 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 OAKTRSPECLENDNEW with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAKTRSPECLENDNEW and Air Canada.
Diversification Opportunities for OAKTRSPECLENDNEW and Air Canada
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OAKTRSPECLENDNEW and Air is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding OAKTRSPECLENDNEW and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW are associated (or correlated) with Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of OAKTRSPECLENDNEW i.e., OAKTRSPECLENDNEW and Air Canada go up and down completely randomly.
Pair Corralation between OAKTRSPECLENDNEW and Air Canada
Assuming the 90 days trading horizon OAKTRSPECLENDNEW is expected to generate 1.59 times less return on investment than Air Canada. But when comparing it to its historical volatility, OAKTRSPECLENDNEW is 1.31 times less risky than Air Canada. It trades about 0.14 of its potential returns per unit of risk. Air Canada is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,576 in Air Canada on September 13, 2024 and sell it today you would earn a total of 101.00 from holding Air Canada or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAKTRSPECLENDNEW vs. Air Canada
Performance |
| Timeline |
| OAKTRSPECLENDNEW |
| Air Canada |
OAKTRSPECLENDNEW and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAKTRSPECLENDNEW and Air Canada
The main advantage of trading using opposite OAKTRSPECLENDNEW and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKTRSPECLENDNEW position performs unexpectedly, Air Canada 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 Air Canada will offset losses from the drop in Air Canada's long position.| OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc |
| Air Canada vs. Check Point Software | Air Canada vs. American Public Education | Air Canada vs. Magic Software Enterprises | Air Canada vs. VITEC SOFTWARE GROUP |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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