Correlation Between Sofina Société and Aimia

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

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

Diversification Opportunities for Sofina Société and Aimia

0.51

Correlation Coefficient

Sofina Société  Aimia

Very weak diversification

The 3 months correlation between Sofina and Aimia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sofina Socit Anonyme and Aimia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aimia Inc and Sofina Société 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 Sofina Socit Anonyme 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 Sofina Société i.e., Sofina Société and Aimia go up and down completely randomly.

Pair Corralation between Sofina Société and Aimia

Assuming the 90 days horizon Sofina Socit Anonyme is expected to generate 2.46 times more return on investment than Aimia. However, Sofina Société is 2.46 times more volatile than Aimia Inc. It trades about 0.13 of its potential returns per unit of risk. Aimia Inc is currently generating about 0.13 per unit of risk. If you would invest  23,743  in Sofina Socit Anonyme on May 7, 2025 and sell it today you would earn a total of  8,297  from holding Sofina Socit Anonyme or generate 34.95% return on investment over 90 days.

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

Sofina Socit Anonyme  vs.  Aimia Inc

Sofina Socit Anonyme

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sofina Socit Anonyme are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Sofina Société reported solid returns over the last few months and may actually be approaching a breakup point.

Aimia Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aimia Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Aimia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sofina Société and Aimia

The main advantage of trading using opposite Sofina Société and Aimia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sofina Société 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 Sofina Socit Anonyme 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.