Correlation Between Aecon and Corus Entertainment

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

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

Diversification Opportunities for Aecon and Corus Entertainment

0.37

Correlation Coefficient

Aecon  Corus Entertainment

Weak diversification

The 3 months correlation between Aecon and Corus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and Corus Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corus Entertainment and Aecon 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 Aecon Group are associated (or correlated) with Corus Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corus Entertainment has no effect on the direction of Aecon i.e., Aecon and Corus Entertainment go up and down completely randomly.

Pair Corralation between Aecon and Corus Entertainment

Assuming the 90 days trading horizon Aecon Group is expected to under-perform the Corus Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Aecon Group is 2.58 times less risky than Corus Entertainment. The stock trades about -0.2 of its potential returns per unit of risk. The Corus Entertainment is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Corus Entertainment on December 2, 2024 and sell it today you would lose (2.00) from holding Corus Entertainment or give up 18.18% of portfolio value over 90 days.

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

Aecon Group  vs.  Corus Entertainment

Aecon Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aecon Group 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 technical and fundamental 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.

Corus Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Corus Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Aecon and Corus Entertainment

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

The idea behind Aecon Group and Corus Entertainment 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..