Correlation Between Ameresco and SNC Lavalin

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

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

Diversification Opportunities for Ameresco and SNC Lavalin

0.75

Correlation Coefficient

Ameresco  SNC Lavalin

Poor diversification

The 3 months correlation between Ameresco and SNC is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ameresco and SNC Lavalin Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNC Lavalin Group and Ameresco 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 Ameresco are associated (or correlated) with SNC Lavalin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNC Lavalin Group has no effect on the direction of Ameresco i.e., Ameresco and SNC Lavalin go up and down completely randomly.

Pair Corralation between Ameresco and SNC Lavalin

Given the investment horizon of 90 days Ameresco is expected to under-perform the SNC Lavalin. In addition to that, Ameresco is 2.64 times more volatile than SNC Lavalin Group. It trades about -0.11 of its total potential returns per unit of risk. SNC Lavalin Group is currently generating about -0.05 per unit of volatility. If you would invest  5,174  in SNC Lavalin Group on December 19, 2024 and sell it today you would lose (498.00) from holding SNC Lavalin Group or give up 9.63% of portfolio value over 90 days.

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

Ameresco  vs.  SNC Lavalin Group

Ameresco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ameresco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

SNC Lavalin Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days SNC Lavalin Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ameresco and SNC Lavalin

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

The idea behind Ameresco and SNC Lavalin 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.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.