Correlation Between Aecon and WSP Global
Can any of the company-specific risk be diversified away by investing in both Aecon and WSP Global 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 WSP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aecon Group and WSP Global, you can compare the effects of market volatilities on Aecon and WSP Global 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 WSP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aecon and WSP Global.
Diversification Opportunities for Aecon and WSP Global
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aecon and WSP is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Aecon Group and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global 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 WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of Aecon i.e., Aecon and WSP Global go up and down completely randomly.
Pair Corralation between Aecon and WSP Global
Assuming the 90 days trading horizon Aecon Group is expected to generate 1.67 times more return on investment than WSP Global. However, Aecon is 1.67 times more volatile than WSP Global. It trades about 0.23 of its potential returns per unit of risk. WSP Global is currently generating about 0.25 per unit of risk. If you would invest 1,525 in Aecon Group on April 25, 2025 and sell it today you would earn a total of 424.00 from holding Aecon Group or generate 27.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aecon Group vs. WSP Global
Performance |
Timeline |
Aecon Group |
WSP Global |
Aecon and WSP Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aecon and WSP Global
The main advantage of trading using opposite Aecon and WSP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aecon position performs unexpectedly, WSP Global 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 WSP Global will offset losses from the drop in WSP Global's long position.Aecon vs. Bird Construction | Aecon vs. Stantec | Aecon vs. WSP Global | Aecon vs. Badger Infrastructure Solutions |
WSP Global vs. Stantec | WSP Global vs. Aecon Group | WSP Global vs. Stantec | WSP Global vs. Badger Infrastructure Solutions |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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