Correlation Between Cielo Waste and IA Financial
Can any of the company-specific risk be diversified away by investing in both Cielo Waste 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 Cielo Waste and IA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cielo Waste Solutions and iA Financial, you can compare the effects of market volatilities on Cielo Waste 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 Cielo Waste with a short position of IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cielo Waste and IA Financial.
Diversification Opportunities for Cielo Waste and IA Financial
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cielo and IAG is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Cielo Waste Solutions and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial and Cielo Waste 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 Cielo Waste Solutions 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 Cielo Waste i.e., Cielo Waste and IA Financial go up and down completely randomly.
Pair Corralation between Cielo Waste and IA Financial
Assuming the 90 days horizon Cielo Waste Solutions is expected to under-perform the IA Financial. In addition to that, Cielo Waste is 5.18 times more volatile than iA Financial. It trades about -0.02 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cielo Waste Solutions vs. iA Financial
Performance |
| Timeline |
| Cielo Waste Solutions |
| iA Financial |
Cielo Waste and IA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cielo Waste and IA Financial
The main advantage of trading using opposite Cielo Waste and IA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cielo Waste 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.| Cielo Waste vs. iShares Canadian HYBrid | Cielo Waste vs. Altagas Cum Red | Cielo Waste vs. European Residential Real | Cielo Waste vs. iShares Fundamental Hedged |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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