Correlation Between Transcontinental and Aimia
Can any of the company-specific risk be diversified away by investing in both Transcontinental and Aimia 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 Transcontinental and Aimia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transcontinental and Aimia Inc, you can compare the effects of market volatilities on Transcontinental and Aimia 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 Transcontinental with a short position of Aimia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transcontinental and Aimia.
Diversification Opportunities for Transcontinental and Aimia
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Transcontinental and Aimia is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Transcontinental and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Transcontinental 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 Transcontinental are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Transcontinental i.e., Transcontinental and Aimia go up and down completely randomly.
Pair Corralation between Transcontinental and Aimia
Assuming the 90 days trading horizon Transcontinental is expected to under-perform the Aimia. But the stock apears to be less risky and, when comparing its historical volatility, Transcontinental is 1.22 times less risky than Aimia. The stock trades about -0.12 of its potential returns per unit of risk. The Aimia Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Aimia Inc on October 13, 2024 and sell it today you would earn a total of 5.00 from holding Aimia Inc or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Transcontinental vs. Aimia Inc
Performance |
| Timeline |
| Transcontinental |
| Aimia Inc |
Transcontinental and Aimia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transcontinental and Aimia
The main advantage of trading using opposite Transcontinental and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transcontinental position performs unexpectedly, Aimia 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 Aimia will offset losses from the drop in Aimia's long position.| Transcontinental vs. Cogeco Communications | Transcontinental vs. Quebecor | Transcontinental vs. CCL Industries | Transcontinental vs. Finning International |
| Aimia vs. Autocanada | Aimia vs. Corus Entertainment | Aimia vs. Element Fleet Management | Aimia vs. Dorel Industries |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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