Correlation Between Aimia Pref and Sprott

Can any of the company-specific risk be diversified away by investing in both Aimia Pref and Sprott 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 Sprott 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 Sprott Inc, you can compare the effects of market volatilities on Aimia Pref and Sprott 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 Sprott. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aimia Pref and Sprott.

Diversification Opportunities for Aimia Pref and Sprott

0.96

Correlation Coefficient

Aimia Pref  Sprott

Almost no diversification

The 3 months correlation between Aimia and Sprott is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Aimia Pref C and Sprott Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Inc 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 Sprott. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Inc has no effect on the direction of Aimia Pref i.e., Aimia Pref and Sprott go up and down completely randomly.

Pair Corralation between Aimia Pref and Sprott

Assuming the 90 days trading horizon Aimia Pref is expected to generate 2.04 times less return on investment than Sprott. But when comparing it to its historical volatility, Aimia Pref C is 1.61 times less risky than Sprott. It trades about 0.36 of its potential returns per unit of risk. Sprott Inc is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  7,110  in Sprott Inc on April 23, 2025 and sell it today you would earn a total of  3,136  from holding Sprott Inc or generate 44.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Aimia Pref C  vs.  Sprott Inc

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 weak primary indicators, Aimia Pref sustained solid returns over the last few months and may actually be approaching a breakup point.

Sprott Inc

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Inc are ranked lower than 36 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Sprott displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aimia Pref and Sprott

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

The idea behind Aimia Pref C and Sprott 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.

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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.