Correlation Between Aimia Pref and Linea Directa

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

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

Diversification Opportunities for Aimia Pref and Linea Directa

0.59

Correlation Coefficient

Aimia Pref  Linea Directa

Very weak diversification

The 3 months correlation between Aimia and Linea is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Pref C and Linea Directa Aseguradora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linea Directa Aseguradora and Aimia Pref 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 Aimia Pref C are associated (or correlated) with Linea Directa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linea Directa Aseguradora has no effect on the direction of Aimia Pref i.e., Aimia Pref and Linea Directa go up and down completely randomly.

Pair Corralation between Aimia Pref and Linea Directa

Assuming the 90 days trading horizon Aimia Pref C is expected to generate 0.5 times more return on investment than Linea Directa. However, Aimia Pref C is 2.0 times less risky than Linea Directa. It trades about 0.36 of its potential returns per unit of risk. Linea Directa Aseguradora is currently generating about 0.16 per unit of risk. If you would invest  1,675  in Aimia Pref C on April 20, 2025 and sell it today you would earn a total of  325.00  from holding Aimia Pref C or generate 19.4% return on investment over 90 days.

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

Aimia Pref C  vs.  Linea Directa Aseguradora

Aimia Pref C

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Aimia Pref C are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile primary indicators, Aimia Pref sustained solid returns over the last few months and may actually be approaching a breakup point.

Linea Directa Aseguradora

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Linea Directa Aseguradora are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Linea Directa exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aimia Pref and Linea Directa

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

The idea behind Aimia Pref C and Linea Directa Aseguradora 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.