Air Canada Stock Beta
| AC Stock | CAD 24.96 0.14 0.56% |
Air Canada fundamentals help investors to digest information that contributes to Air Canada's financial success or failures. It also enables traders to predict the movement of Air Stock. The fundamental analysis module provides a way to measure Air Canada's intrinsic value by examining its available economic and financial indicators, including the cash flow records, the balance sheet account changes, the income statement patterns, and various microeconomic indicators and financial ratios related to Air Canada stock.
Air | Beta |
Air Canada Company Beta Analysis
Air Canada's Beta is one of the most important measures of equity market volatility. Beta can be thought of as asset elasticity or sensitivity to market. In other words, it is a number that shows the relationship of an equity instrument to the financial market in which this instrument is traded. For example, if Beta of equity is 2, it is expected to significantly outperform market when the market is going up and significantly underperform when the market is going down. Similarly, Beta of 1 indicates that an asset and market will generate similar returns over time.
Current Air Canada Beta | 2.41 |
Most of Air Canada's fundamental indicators, such as Beta, are part of a valuation analysis module that helps investors searching for stocks that are currently trading at higher or lower prices than their real value. If the real value is higher than the market price, Air Canada is considered to be undervalued, and we provide a buy recommendation. Otherwise, we render a sell signal.
Air Beta Driver Correlations
Understanding the fundamental principles of building solid financial models for Air Canada is extremely important. It helps to project a fair market value of Air Stock properly, considering its historical fundamentals such as Beta. Since Air Canada's main accounts across its financial reports are all linked and dependent on each other, it is essential to analyze all possible correlations between related accounts. However, instead of reviewing all of Air Canada's historical financial statements, investors can examine the correlated drivers to determine its overall health. This can be effectively done using a conventional correlation matrix of Air Canada's interrelated accounts and indicators.
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In a nutshell, Beta is a measure of individual stock risk relative to the overall volatility of the stock market. and is calculated based on very sound finance theory - Capital Assets Pricing Model (CAPM).However, since Beta is calculated based on historical price movements it may not predict how a firm's stock is going to perform in the future.
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In accordance with the recently published financial statements, Air Canada has a Beta of 2.407. This is 75.69% higher than that of the Passenger Airlines sector and 135.98% higher than that of the Industrials industry. The beta for all Canada stocks is notably lower than that of the firm.
Air Beta Peer Comparison
Stock peer comparison is one of the most widely used and accepted methods of equity analyses. It analyses Air Canada's direct or indirect competition against its Beta to detect undervalued stocks with similar characteristics or determine the stocks which would be a good addition to a portfolio. Peer analysis of Air Canada could also be used in its relative valuation, which is a method of valuing Air Canada by comparing valuation metrics of similar companies.Air Canada is currently under evaluation in beta category among its peers.
Fund Asset Allocation for Air Canada
The fund invests 56.18% of asset under management in tradable equity instruments, with the rest of investments concentrated in bonds (40.66%) , cash (2.79%) and various exotic instruments.Asset allocation divides Air Canada's investment portfolio among different asset categories to balance risk and reward by investing in a diversified mix of instruments that align with the investor's goals, risk tolerance, and time horizon. Mutual funds, which pool money from multiple investors to buy a diversified portfolio of securities, use asset allocation strategies to manage the risk and return of their portfolios.
Mutual funds allocate their assets by investing in a diversified portfolio of securities, such as stocks, bonds, cryptocurrencies and cash. The specific mix of these securities is determined by the fund's investment objective and strategy. For example, a stock mutual fund may invest primarily in equities, while a bond mutual fund may invest mainly in fixed-income securities. The fund's manager, responsible for making investment decisions, will buy and sell securities in the fund's portfolio as market conditions and the fund's objectives change.
As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Air Canada will likely underperform.
Air Fundamentals
About Air Canada Fundamental Analysis
The Macroaxis Fundamental Analysis modules help investors analyze Air Canada's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Air Canada using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Air Canada based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.
Pair Trading with Air Canada
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Air Canada position performs unexpectedly, the other equity 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 appreciate offsetting losses from the drop in the long position's value.Moving together with Air Stock
The ability to find closely correlated positions to Air Canada could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Air Canada when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Air Canada - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Air Canada to buy it.
The correlation of Air Canada is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Air Canada moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Air Canada moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Air Canada can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Other Information on Investing in Air Stock
Air Canada financial ratios help investors to determine whether Air Stock is cheap or expensive when compared to a particular measure, such as profits or enterprise value. In other words, they help investors to determine the cost of investment in Air with respect to the benefits of owning Air Canada security.