Correlation Between CVW CleanTech and Intact Financial
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech and Intact 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 CVW CleanTech and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Intact Financial Corp, you can compare the effects of market volatilities on CVW CleanTech and Intact 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 CVW CleanTech with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Intact Financial.
Diversification Opportunities for CVW CleanTech and Intact Financial
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVW and Intact is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech and Intact Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial Corp and CVW CleanTech 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 CVW CleanTech are associated (or correlated) with Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial Corp has no effect on the direction of CVW CleanTech i.e., CVW CleanTech and Intact Financial go up and down completely randomly.
Pair Corralation between CVW CleanTech and Intact Financial
Assuming the 90 days horizon CVW CleanTech is expected to generate 1.57 times less return on investment than Intact Financial. In addition to that, CVW CleanTech is 4.96 times more volatile than Intact Financial Corp. It trades about 0.01 of its total potential returns per unit of risk. Intact Financial Corp is currently generating about 0.08 per unit of volatility. If you would invest 1,715 in Intact Financial Corp on September 4, 2024 and sell it today you would earn a total of 711.00 from holding Intact Financial Corp or generate 41.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Intact Financial Corp
Performance |
| Timeline |
| CVW CleanTech |
| Intact Financial Corp |
CVW CleanTech and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Intact Financial
The main advantage of trading using opposite CVW CleanTech and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech position performs unexpectedly, Intact 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 Intact Financial will offset losses from the drop in Intact Financial's long position.The idea behind CVW CleanTech and Intact Financial Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Intact Financial vs. Apple Inc CDR | Intact Financial vs. Microsoft Corp CDR | Intact Financial vs. Amazon CDR | Intact Financial vs. Alphabet Inc CDR |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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