Correlation Between Exchange Income and Aecon

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

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

Diversification Opportunities for Exchange Income and Aecon

0.91

Correlation Coefficient

Exchange Income  Aecon

Almost no diversification

The 3 months correlation between Exchange and Aecon is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income and Aecon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aecon Group and Exchange Income 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 Exchange Income are associated (or correlated) with Aecon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aecon Group has no effect on the direction of Exchange Income i.e., Exchange Income and Aecon go up and down completely randomly.

Pair Corralation between Exchange Income and Aecon

Assuming the 90 days trading horizon Exchange Income is expected to generate 0.46 times more return on investment than Aecon. However, Exchange Income is 2.17 times less risky than Aecon. It trades about 0.46 of its potential returns per unit of risk. Aecon Group is currently generating about 0.11 per unit of risk. If you would invest  4,941  in Exchange Income on April 23, 2025 and sell it today you would earn a total of  1,648  from holding Exchange Income or generate 33.35% return on investment over 90 days.

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

Exchange Income  vs.  Aecon Group

Exchange Income

Risk-Adjusted Performance

Very Strong

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

Aecon Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aecon Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Aecon displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exchange Income and Aecon

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

The idea behind Exchange Income and Aecon Group 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.