Correlation Between FLOW TRADERS and Air Canada
Can any of the company-specific risk be diversified away by investing in both FLOW TRADERS 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 FLOW TRADERS and Air Canada into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLOW TRADERS LTD and Air Canada, you can compare the effects of market volatilities on FLOW TRADERS 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 FLOW TRADERS with a short position of Air Canada. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLOW TRADERS and Air Canada.
Diversification Opportunities for FLOW TRADERS and Air Canada
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FLOW and Air is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and FLOW TRADERS 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 FLOW TRADERS LTD 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 FLOW TRADERS i.e., FLOW TRADERS and Air Canada go up and down completely randomly.
Pair Corralation between FLOW TRADERS and Air Canada
Assuming the 90 days horizon FLOW TRADERS LTD is expected to generate 1.26 times more return on investment than Air Canada. However, FLOW TRADERS is 1.26 times more volatile than Air Canada. It trades about 0.07 of its potential returns per unit of risk. Air Canada is currently generating about -0.3 per unit of risk. If you would invest 2,442 in FLOW TRADERS LTD on December 8, 2024 and sell it today you would earn a total of 92.00 from holding FLOW TRADERS LTD or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FLOW TRADERS LTD vs. Air Canada
Performance |
| Timeline |
| FLOW TRADERS LTD |
| Air Canada |
FLOW TRADERS and Air Canada Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLOW TRADERS and Air Canada
The main advantage of trading using opposite FLOW TRADERS and Air Canada positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLOW TRADERS 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.| FLOW TRADERS vs. MPH Health Care | ||
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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