Correlation Between Sprott and Aimia

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

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

Diversification Opportunities for Sprott and Aimia

0.57

Correlation Coefficient

Sprott  Aimia

Very weak diversification

The 3 months correlation between Sprott and Aimia is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sprott Inc and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Sprott 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 Sprott Inc are associated (or correlated) with Aimia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aimia Inc has no effect on the direction of Sprott i.e., Sprott and Aimia go up and down completely randomly.

Pair Corralation between Sprott and Aimia

Assuming the 90 days trading horizon Sprott Inc is expected to generate 0.78 times more return on investment than Aimia. However, Sprott Inc is 1.28 times less risky than Aimia. It trades about 0.46 of its potential returns per unit of risk. Aimia Inc is currently generating about 0.18 per unit of risk. 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	Weak
Accuracy	98.41%
Values	Daily Returns

Sprott Inc  vs.  Aimia Inc

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.

Aimia Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aimia Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, Aimia displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sprott and Aimia

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

The idea behind Sprott Inc and Aimia 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.