Correlation Between Carbon Streaming and Aimia

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

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

Diversification Opportunities for Carbon Streaming and Aimia

0.08

Correlation Coefficient

Carbon Streaming  Aimia

Significant diversification

The 3 months correlation between Carbon and Aimia is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Carbon Streaming Corp and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Carbon Streaming 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 Carbon Streaming Corp 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 Carbon Streaming i.e., Carbon Streaming and Aimia go up and down completely randomly.

Pair Corralation between Carbon Streaming and Aimia

Assuming the 90 days horizon Carbon Streaming Corp is expected to generate 3.16 times more return on investment than Aimia. However, Carbon Streaming is 3.16 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  163.00  in Carbon Streaming Corp on October 21, 2024 and sell it today you would lose (123.00) from holding Carbon Streaming Corp or give up 75.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.81%
Values	Daily Returns

Carbon Streaming Corp  vs.  Aimia Inc

Carbon Streaming Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carbon Streaming Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carbon Streaming may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aimia Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aimia Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Aimia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Carbon Streaming and Aimia

The main advantage of trading using opposite Carbon Streaming and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carbon Streaming 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 Carbon Streaming Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.