Correlation Between Aecon and VentriPoint Diagnostics

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

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

Diversification Opportunities for Aecon and VentriPoint Diagnostics

-0.81

Correlation Coefficient

Aecon  VentriPoint Diagnostics

Pay attention - limited upside

The 3 months correlation between Aecon and VentriPoint is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and VentriPoint Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VentriPoint Diagnostics 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 VentriPoint Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VentriPoint Diagnostics has no effect on the direction of Aecon i.e., Aecon and VentriPoint Diagnostics go up and down completely randomly.

Pair Corralation between Aecon and VentriPoint Diagnostics

Assuming the 90 days trading horizon Aecon Group is expected to under-perform the VentriPoint Diagnostics. But the stock apears to be less risky and, when comparing its historical volatility, Aecon Group is 3.98 times less risky than VentriPoint Diagnostics. The stock trades about -0.25 of its potential returns per unit of risk. The VentriPoint Diagnostics is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  10.00  in VentriPoint Diagnostics on December 31, 2024 and sell it today you would earn a total of  8.00  from holding VentriPoint Diagnostics or generate 80.0% return on investment over 90 days.

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

Aecon Group  vs.  VentriPoint Diagnostics

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.

VentriPoint Diagnostics

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VentriPoint Diagnostics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, VentriPoint Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aecon and VentriPoint Diagnostics

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

The idea behind Aecon Group and VentriPoint Diagnostics 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.