Correlation Between Westaim Corp and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Westaim Corp and AKITA Drilling 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 Westaim Corp and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westaim Corp and AKITA Drilling, you can compare the effects of market volatilities on Westaim Corp and AKITA Drilling 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 Westaim Corp with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westaim Corp and AKITA Drilling.
Diversification Opportunities for Westaim Corp and AKITA Drilling
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westaim and AKITA is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Westaim Corp and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Westaim Corp 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 Westaim Corp are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Westaim Corp i.e., Westaim Corp and AKITA Drilling go up and down completely randomly.
Pair Corralation between Westaim Corp and AKITA Drilling
Assuming the 90 days horizon Westaim Corp is expected to generate 0.43 times more return on investment than AKITA Drilling. However, Westaim Corp is 2.31 times less risky than AKITA Drilling. It trades about 0.11 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.01 per unit of risk. If you would invest 250.00 in Westaim Corp on September 3, 2024 and sell it today you would earn a total of 245.00 from holding Westaim Corp or generate 98.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westaim Corp vs. AKITA Drilling
Performance |
| Timeline |
| Westaim Corp |
| AKITA Drilling |
Westaim Corp and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westaim Corp and AKITA Drilling
The main advantage of trading using opposite Westaim Corp and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westaim Corp position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
| AKITA Drilling vs. Pason Systems | AKITA Drilling vs. Enerflex | AKITA Drilling vs. Quarterhill | AKITA Drilling vs. Westaim 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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