Correlation Between SNC Lavalin and Aecon
Can any of the company-specific risk be diversified away by investing in both SNC Lavalin and Aecon 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 SNC Lavalin and Aecon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SNC Lavalin Group and Aecon Group, you can compare the effects of market volatilities on SNC Lavalin and Aecon 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 SNC Lavalin with a short position of Aecon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SNC Lavalin and Aecon.
Diversification Opportunities for SNC Lavalin and Aecon
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SNC and Aecon is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SNC Lavalin Group and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and SNC Lavalin 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 SNC Lavalin Group are associated (or correlated) with Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of SNC Lavalin i.e., SNC Lavalin and Aecon go up and down completely randomly.
Pair Corralation between SNC Lavalin and Aecon
Assuming the 90 days horizon SNC Lavalin is expected to generate 1.05 times less return on investment than Aecon. In addition to that, SNC Lavalin is 1.01 times more volatile than Aecon Group. It trades about 0.24 of its total potential returns per unit of risk. Aecon Group is currently generating about 0.26 per unit of volatility. If you would invest 1,544 in Aecon Group on August 28, 2024 and sell it today you would earn a total of 553.00 from holding Aecon Group or generate 35.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SNC Lavalin Group vs. Aecon Group
Performance |
| Timeline |
| SNC Lavalin Group |
| Aecon Group |
SNC Lavalin and Aecon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SNC Lavalin and Aecon
The main advantage of trading using opposite SNC Lavalin and Aecon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SNC Lavalin position performs unexpectedly, Aecon 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 Aecon will offset losses from the drop in Aecon's long position.| SNC Lavalin vs. Aecon Group | SNC Lavalin vs. Acciona SA | SNC Lavalin vs. WSP Global | SNC Lavalin vs. SIG Combibloc Group |
| Aecon vs. Element Solutions | Aecon vs. Orion Engineered Carbons | Aecon vs. Minerals Technologies | Aecon vs. Ingevity Corp |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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