Correlation Between REVO INSURANCE and Air Canada
Can any of the company-specific risk be diversified away by investing in both REVO INSURANCE 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 REVO INSURANCE and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REVO INSURANCE SPA and Air Canada, you can compare the effects of market volatilities on REVO INSURANCE 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 REVO INSURANCE with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of REVO INSURANCE and Air Canada.
Diversification Opportunities for REVO INSURANCE and Air Canada
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between REVO and Air is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding REVO INSURANCE SPA and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and REVO INSURANCE 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 REVO INSURANCE SPA 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 REVO INSURANCE i.e., REVO INSURANCE and Air Canada go up and down completely randomly.
Pair Corralation between REVO INSURANCE and Air Canada
Assuming the 90 days horizon REVO INSURANCE SPA is expected to generate 0.7 times more return on investment than Air Canada. However, REVO INSURANCE SPA is 1.42 times less risky than Air Canada. It trades about 0.27 of its potential returns per unit of risk. Air Canada is currently generating about 0.12 per unit of risk. If you would invest 1,035 in REVO INSURANCE SPA on September 14, 2024 and sell it today you would earn a total of 70.00 from holding REVO INSURANCE SPA or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
REVO INSURANCE SPA vs. Air Canada
Performance |
| Timeline |
| REVO INSURANCE SPA |
| Air Canada |
REVO INSURANCE and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REVO INSURANCE and Air Canada
The main advantage of trading using opposite REVO INSURANCE and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REVO INSURANCE 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.| REVO INSURANCE vs. Lyxor 1 | REVO INSURANCE vs. Xtrackers LevDAX | REVO INSURANCE vs. Xtrackers ShortDAX | REVO INSURANCE vs. Superior Plus Corp |
| Air Canada vs. MAGNUM MINING EXP | Air Canada vs. CHIBA BANK | Air Canada vs. Zijin Mining Group | Air Canada vs. REVO INSURANCE SPA |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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