Correlation Between Aecon and Thunderbird Entertainment

Can any of the company-specific risk be diversified away by investing in both Aecon 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 Aecon and Thunderbird 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 Thunderbird Entertainment Group, you can compare the effects of market volatilities on Aecon 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 Aecon with a short position of Thunderbird Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and Thunderbird Entertainment.

Diversification Opportunities for Aecon and Thunderbird Entertainment

0.57

Correlation Coefficient

Aecon  Thunderbird Entertainment

Very weak diversification

The 3 months correlation between Aecon and Thunderbird is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and Thunderbird Entertainment Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunderbird 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 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 Aecon i.e., Aecon and Thunderbird Entertainment go up and down completely randomly.

Pair Corralation between Aecon and Thunderbird Entertainment

Assuming the 90 days trading horizon Aecon Group is expected to under-perform the Thunderbird Entertainment. In addition to that, Aecon is 1.0 times more volatile than Thunderbird Entertainment Group. It trades about -0.25 of its total potential returns per unit of risk. Thunderbird Entertainment Group is currently generating about -0.06 per unit of volatility. If you would invest  185.00  in Thunderbird Entertainment Group on December 31, 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

Aecon Group  vs.  Thunderbird Entertainment Grou

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 May 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 Aecon and Thunderbird Entertainment

The main advantage of trading using opposite Aecon and Thunderbird Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon 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 Aecon Group 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.

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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.