Correlation Between Alithya Group and Canadian Pacific

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

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

Diversification Opportunities for Alithya Group and Canadian Pacific

-0.56

Correlation Coefficient

Alithya Group  Canadian Pacific

Excellent diversification

The 3 months correlation between Alithya and Canadian is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Alithya Group inc and Canadian Pacific Railway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Pacific Railway and Alithya Group 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 Alithya Group inc are associated (or correlated) with Canadian Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Pacific Railway has no effect on the direction of Alithya Group i.e., Alithya Group and Canadian Pacific go up and down completely randomly.

Pair Corralation between Alithya Group and Canadian Pacific

Assuming the 90 days trading horizon Alithya Group inc is expected to generate 3.11 times more return on investment than Canadian Pacific. However, Alithya Group is 3.11 times more volatile than Canadian Pacific Railway. It trades about 0.06 of its potential returns per unit of risk. Canadian Pacific Railway is currently generating about -0.13 per unit of risk. If you would invest  175.00  in Alithya Group inc on May 21, 2025 and sell it today you would earn a total of  17.00  from holding Alithya Group inc or generate 9.71% return on investment over 90 days.

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

Alithya Group inc  vs.  Canadian Pacific Railway

Alithya Group inc

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Alithya Group inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alithya Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Canadian Pacific Railway

Risk-Adjusted Performance

Weakest

Over the last 90 days Canadian Pacific Railway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Alithya Group and Canadian Pacific

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

The idea behind Alithya Group inc and Canadian Pacific Railway 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.