Correlation Between First National and Aimia Pref
Can any of the company-specific risk be diversified away by investing in both First National and Aimia Pref 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 First National and Aimia Pref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Financial and Aimia Pref C, you can compare the effects of market volatilities on First National and Aimia Pref 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 First National with a short position of Aimia Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Aimia Pref.
Diversification Opportunities for First National and Aimia Pref
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Aimia is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Aimia Pref C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Pref C and First National 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 First National Financial are associated (or correlated) with Aimia Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Pref C has no effect on the direction of First National i.e., First National and Aimia Pref go up and down completely randomly.
Pair Corralation between First National and Aimia Pref
Assuming the 90 days trading horizon First National is expected to generate 1.24 times less return on investment than Aimia Pref. In addition to that, First National is 1.52 times more volatile than Aimia Pref C. It trades about 0.19 of its total potential returns per unit of risk. Aimia Pref C is currently generating about 0.36 per unit of volatility. If you would invest 1,675 in Aimia Pref C on April 23, 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 | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
First National Financial vs. Aimia Pref C
Performance |
Timeline |
First National Financial |
Aimia Pref C |
First National and Aimia Pref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First National and Aimia Pref
The main advantage of trading using opposite First National and Aimia Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Aimia Pref 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 Pref will offset losses from the drop in Aimia Pref's long position.First National vs. EQB Inc | First National vs. First National Financial | First National vs. Dominion Lending Centres | First National vs. Timbercreek Financial Corp |
Aimia Pref vs. Aimia Inc | Aimia Pref vs. Aimia Srs 1 | Aimia Pref vs. Allfunds Group | Aimia Pref vs. Great Elm Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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