Correlation Between Altima Resources and IGM Financial
Can any of the company-specific risk be diversified away by investing in both Altima Resources and IGM 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 Altima Resources and IGM Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altima Resources and IGM Financial, you can compare the effects of market volatilities on Altima Resources and IGM 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 Altima Resources with a short position of IGM Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altima Resources and IGM Financial.
Diversification Opportunities for Altima Resources and IGM Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Altima and IGM is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Altima Resources and IGM Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Financial and Altima Resources 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 Altima Resources are associated (or correlated) with IGM Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGM Financial has no effect on the direction of Altima Resources i.e., Altima Resources and IGM Financial go up and down completely randomly.
Pair Corralation between Altima Resources and IGM Financial
Assuming the 90 days horizon Altima Resources is expected to generate 10.65 times more return on investment than IGM Financial. However, Altima Resources is 10.65 times more volatile than IGM Financial. It trades about 0.09 of its potential returns per unit of risk. IGM Financial is currently generating about 0.14 per unit of risk. If you would invest 6.00 in Altima Resources on September 12, 2024 and sell it today you would earn a total of 10.00 from holding Altima Resources or generate 166.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altima Resources vs. IGM Financial
Performance |
| Timeline |
| Altima Resources |
| IGM Financial |
Altima Resources and IGM Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altima Resources and IGM Financial
The main advantage of trading using opposite Altima Resources and IGM Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altima Resources position performs unexpectedly, IGM 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 IGM Financial will offset losses from the drop in IGM Financial's long position.| Altima Resources vs. IGM Financial | Altima Resources vs. Royal Bank of | Altima Resources vs. Canadian Imperial Bank | Altima Resources vs. Fairfax Financial Holdings |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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