Correlation Between Fidelity Minerals and Air Canada
Can any of the company-specific risk be diversified away by investing in both Fidelity Minerals 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 Fidelity Minerals and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity Minerals Corp and Air Canada, you can compare the effects of market volatilities on Fidelity Minerals 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 Fidelity Minerals with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Minerals and Air Canada.
Diversification Opportunities for Fidelity Minerals and Air Canada
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fidelity and Air is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Minerals Corp and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and Fidelity Minerals 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 Fidelity Minerals Corp 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 Fidelity Minerals i.e., Fidelity Minerals and Air Canada go up and down completely randomly.
Pair Corralation between Fidelity Minerals and Air Canada
Assuming the 90 days horizon Fidelity Minerals Corp is expected to generate 6.89 times more return on investment than Air Canada. However, Fidelity Minerals is 6.89 times more volatile than Air Canada. It trades about 0.06 of its potential returns per unit of risk. Air Canada is currently generating about 0.27 per unit of risk. If you would invest 5.50 in Fidelity Minerals Corp on September 5, 2024 and sell it today you would lose (1.00) from holding Fidelity Minerals Corp or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.82% |
| Values | Daily Returns |
Fidelity Minerals Corp vs. Air Canada
Performance |
| Timeline |
| Fidelity Minerals Corp |
| Air Canada |
Fidelity Minerals and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity Minerals and Air Canada
The main advantage of trading using opposite Fidelity Minerals and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Minerals 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.| Fidelity Minerals vs. Air Canada | Fidelity Minerals vs. Rocky Mountain Liquor | Fidelity Minerals vs. Maple Leaf Foods | Fidelity Minerals vs. Wilmington Capital Management |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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