Correlation Between Aimia and Yellow Pages
Can any of the company-specific risk be diversified away by investing in both Aimia and Yellow Pages 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 Aimia and Yellow Pages into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aimia Inc and Yellow Pages Limited, you can compare the effects of market volatilities on Aimia and Yellow Pages 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 Aimia with a short position of Yellow Pages. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia and Yellow Pages.
Diversification Opportunities for Aimia and Yellow Pages
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aimia and Yellow is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Inc and Yellow Pages Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yellow Pages Limited and Aimia 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 Aimia Inc are associated (or correlated) with Yellow Pages. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yellow Pages Limited has no effect on the direction of Aimia i.e., Aimia and Yellow Pages go up and down completely randomly.
Pair Corralation between Aimia and Yellow Pages
Assuming the 90 days trading horizon Aimia Inc is expected to generate 1.06 times more return on investment than Yellow Pages. However, Aimia is 1.06 times more volatile than Yellow Pages Limited. It trades about 0.2 of its potential returns per unit of risk. Yellow Pages Limited is currently generating about 0.0 per unit of risk. If you would invest 237.00 in Aimia Inc on September 24, 2024 and sell it today you would earn a total of 18.00 from holding Aimia Inc or generate 7.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Aimia Inc vs. Yellow Pages Limited
Performance |
Timeline |
Aimia Inc |
Yellow Pages Limited |
Aimia and Yellow Pages Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aimia and Yellow Pages
The main advantage of trading using opposite Aimia and Yellow Pages positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aimia position performs unexpectedly, Yellow Pages 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 Yellow Pages will offset losses from the drop in Yellow Pages' long position.The idea behind Aimia Inc and Yellow Pages Limited 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.Yellow Pages vs. Stingray Group | Yellow Pages vs. Richelieu Hardware | Yellow Pages vs. Aimia Inc | Yellow Pages vs. TECSYS Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |