Correlation Between Corus Entertainment and Aimia

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

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

Diversification Opportunities for Corus Entertainment and Aimia

0.36

Correlation Coefficient

Corus Entertainment  Aimia

Weak diversification

The 3 months correlation between Corus and Aimia is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Corus Entertainment and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Corus Entertainment 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 Corus Entertainment are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Corus Entertainment i.e., Corus Entertainment and Aimia go up and down completely randomly.

Pair Corralation between Corus Entertainment and Aimia

Assuming the 90 days trading horizon Corus Entertainment is expected to generate 4.52 times more return on investment than Aimia. However, Corus Entertainment is 4.52 times more volatile than Aimia Inc. It trades about 0.01 of its potential returns per unit of risk. Aimia Inc is currently generating about 0.02 per unit of risk. If you would invest  14.00  in Corus Entertainment on September 3, 2024 and sell it today you would lose (2.00) from holding Corus Entertainment or give up 14.29% of portfolio value over 90 days.

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

Corus Entertainment  vs.  Aimia Inc

Corus Entertainment

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Corus Entertainment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Aimia Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aimia Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Aimia is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Corus Entertainment and Aimia

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

The idea behind Corus Entertainment and Aimia Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.