Correlation Between Air Canada and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both Air Canada and Thunderbird Entertainment 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 Air Canada and Thunderbird Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Air Canada and Thunderbird Entertainment Group, you can compare the effects of market volatilities on Air Canada and Thunderbird Entertainment 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 Air Canada with a short position of Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Canada and Thunderbird Entertainment.

Diversification Opportunities for Air Canada and Thunderbird Entertainment

0.48

Correlation Coefficient

Air Canada  Thunderbird Entertainment

Very weak diversification

The 3 months correlation between Air and Thunderbird is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Air Canada and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird Entertainment and Air Canada 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 Air Canada are associated (or correlated) with Thunderbird Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunderbird Entertainment has no effect on the direction of Air Canada i.e., Air Canada and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Air Canada and Thunderbird Entertainment

Assuming the 90 days horizon Air Canada is expected to under-perform the Thunderbird Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Air Canada is 1.55 times less risky than Thunderbird Entertainment. The stock trades about -0.39 of its potential returns per unit of risk. The Thunderbird Entertainment Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  185.00  in Thunderbird Entertainment Group on December 30, 2024 and sell it today you would lose (23.00) from holding Thunderbird Entertainment Group or give up 12.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Air Canada  vs.  Thunderbird Entertainment Grou

Air Canada

Risk-Adjusted Performance

Very Weak

Over the last 90 days Air Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Thunderbird Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Thunderbird Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Air Canada and Thunderbird Entertainment

The main advantage of trading using opposite Air Canada and Thunderbird Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Canada position performs unexpectedly, Thunderbird Entertainment 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 Thunderbird Entertainment will offset losses from the drop in Thunderbird Entertainment's long position.

The idea behind Air Canada and Thunderbird Entertainment Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.