Correlation Between Neptune Digital and Air Canada

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

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

Diversification Opportunities for Neptune Digital and Air Canada

-0.42

Correlation Coefficient

Neptune Digital  Air Canada

Very good diversification

The 3 months correlation between Neptune and Air is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Neptune Digital Assets and Air Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Canada and Neptune Digital 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 Neptune Digital Assets are associated (or correlated) with Air Canada. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Canada has no effect on the direction of Neptune Digital i.e., Neptune Digital and Air Canada go up and down completely randomly.

Pair Corralation between Neptune Digital and Air Canada

Assuming the 90 days horizon Neptune Digital Assets is expected to under-perform the Air Canada. In addition to that, Neptune Digital is 1.72 times more volatile than Air Canada. It trades about -0.07 of its total potential returns per unit of risk. Air Canada is currently generating about 0.14 per unit of volatility. If you would invest  1,500  in Air Canada on May 5, 2025 and sell it today you would earn a total of  406.00  from holding Air Canada or generate 27.07% return on investment over 90 days.

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

Neptune Digital Assets  vs.  Air Canada

Neptune Digital Assets

Risk-Adjusted Performance

Very Weak

Over the last 90 days Neptune Digital Assets has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Air Canada

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Air Canada are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Air Canada displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Neptune Digital and Air Canada

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

The idea behind Neptune Digital Assets and Air Canada 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..