Correlation Between Alaska Energy and IA Financial
Can any of the company-specific risk be diversified away by investing in both Alaska Energy and IA Financial 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 Alaska Energy and IA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alaska Energy Metals and iA Financial, you can compare the effects of market volatilities on Alaska Energy and IA Financial 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 Alaska Energy with a short position of IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alaska Energy and IA Financial.
Diversification Opportunities for Alaska Energy and IA Financial
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Alaska and IAG is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Alaska Energy Metals and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial and Alaska Energy 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 Alaska Energy Metals are associated (or correlated) with IA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iA Financial has no effect on the direction of Alaska Energy i.e., Alaska Energy and IA Financial go up and down completely randomly.
Pair Corralation between Alaska Energy and IA Financial
Assuming the 90 days trading horizon Alaska Energy is expected to generate 1.18 times less return on investment than IA Financial. In addition to that, Alaska Energy is 5.72 times more volatile than iA Financial. It trades about 0.01 of its total potential returns per unit of risk. iA Financial is currently generating about 0.09 per unit of volatility. If you would invest 7,294 in iA Financial on September 14, 2024 and sell it today you would earn a total of 6,168 from holding iA Financial or generate 84.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alaska Energy Metals vs. iA Financial
Performance |
| Timeline |
| Alaska Energy Metals |
| iA Financial |
Alaska Energy and IA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alaska Energy and IA Financial
The main advantage of trading using opposite Alaska Energy and IA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alaska Energy position performs unexpectedly, IA Financial 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 IA Financial will offset losses from the drop in IA Financial's long position.| Alaska Energy vs. HPQ Silicon Resources | Alaska Energy vs. Converge Technology Solutions | Alaska Energy vs. Advent Wireless | Alaska Energy vs. Firan Technology Group |
| IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life Financial | IA Financial vs. Laurentian Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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