Correlation Between Altai Resources and IA Financial
Can any of the company-specific risk be diversified away by investing in both Altai Resources 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 Altai Resources and IA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altai Resources and iA Financial, you can compare the effects of market volatilities on Altai Resources 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 Altai Resources with a short position of IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altai Resources and IA Financial.
Diversification Opportunities for Altai Resources and IA Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Altai and IAG is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Altai Resources and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial and Altai 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 Altai Resources 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 Altai Resources i.e., Altai Resources and IA Financial go up and down completely randomly.
Pair Corralation between Altai Resources and IA Financial
Assuming the 90 days horizon Altai Resources is expected to generate 1.37 times less return on investment than IA Financial. In addition to that, Altai Resources is 4.95 times more volatile than iA Financial. It trades about 0.03 of its total potential returns per unit of risk. iA Financial is currently generating about 0.2 per unit of volatility. If you would invest 8,699 in iA Financial on September 3, 2024 and sell it today you would earn a total of 4,684 from holding iA Financial or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altai Resources vs. iA Financial
Performance |
| Timeline |
| Altai Resources |
| iA Financial |
Altai Resources and IA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altai Resources and IA Financial
The main advantage of trading using opposite Altai Resources and IA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altai Resources 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.| Altai Resources vs. iA Financial | Altai Resources vs. Canso Credit Trust | Altai Resources vs. Quorum Information Technologies | Altai Resources vs. Fairfax Financial Holdings |
| IA Financial vs. Great West Lifeco | IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life Financial |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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