Correlation Between NeuPath Health and Air Canada
Can any of the company-specific risk be diversified away by investing in both NeuPath Health 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 NeuPath Health and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NeuPath Health and Air Canada, you can compare the effects of market volatilities on NeuPath Health 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 NeuPath Health with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of NeuPath Health and Air Canada.
Diversification Opportunities for NeuPath Health and Air Canada
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NeuPath and Air is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding NeuPath Health and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and NeuPath Health 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 NeuPath Health 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 NeuPath Health i.e., NeuPath Health and Air Canada go up and down completely randomly.
Pair Corralation between NeuPath Health and Air Canada
Assuming the 90 days trading horizon NeuPath Health is expected to generate 2.81 times more return on investment than Air Canada. However, NeuPath Health is 2.81 times more volatile than Air Canada. It trades about 0.03 of its potential returns per unit of risk. Air Canada is currently generating about 0.04 per unit of risk. If you would invest 16.00 in NeuPath Health on September 3, 2024 and sell it today you would earn a total of 1.00 from holding NeuPath Health or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NeuPath Health vs. Air Canada
Performance |
| Timeline |
| NeuPath Health |
| Air Canada |
NeuPath Health and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NeuPath Health and Air Canada
The main advantage of trading using opposite NeuPath Health and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NeuPath Health 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.| NeuPath Health vs. East Side Games | NeuPath Health vs. Metalero Mining Corp | NeuPath Health vs. Globex Mining Enterprises | NeuPath Health vs. Ramp Metals |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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