Correlation Between Element Fleet and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Element Fleet 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 Element Fleet and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Element Fleet Management and Intact Financial Corp, you can compare the effects of market volatilities on Element Fleet 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 Element Fleet with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Element Fleet and Intact Financial.
Diversification Opportunities for Element Fleet and Intact Financial
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Element and Intact is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Element Fleet Management 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 Element Fleet 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 Element Fleet Management 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 Element Fleet i.e., Element Fleet and Intact Financial go up and down completely randomly.
Pair Corralation between Element Fleet and Intact Financial
Assuming the 90 days trading horizon Element Fleet Management is expected to generate 1.92 times more return on investment than Intact Financial. However, Element Fleet is 1.92 times more volatile than Intact Financial Corp. It trades about 0.06 of its potential returns per unit of risk. Intact Financial Corp is currently generating about 0.1 per unit of risk. If you would invest 2,820 in Element Fleet Management on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Element Fleet Management or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Element Fleet Management vs. Intact Financial Corp
Performance |
| Timeline |
| Element Fleet Management |
| Intact Financial Corp |
Element Fleet and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Element Fleet and Intact Financial
The main advantage of trading using opposite Element Fleet and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Element Fleet 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.| Element Fleet vs. Current Water Technologies | Element Fleet vs. Plurilock Security | Element Fleet vs. PowerBand Solutions | Element Fleet vs. iShares Canadian HYBrid |
| Intact Financial vs. Brookfield Infrastructure Partners | Intact Financial vs. Brookfield Infrastructure Partners | Intact Financial vs. iShares Canadian HYBrid | Intact Financial vs. Solar Alliance Energy |
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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