Correlation Between Electra Battery and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Electra Battery 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 Electra Battery and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electra Battery Materials and Intact Financial, you can compare the effects of market volatilities on Electra Battery 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 Electra Battery with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra Battery and Intact Financial.
Diversification Opportunities for Electra Battery and Intact Financial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Electra and Intact is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Electra Battery Materials and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Electra Battery 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 Electra Battery Materials 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 has no effect on the direction of Electra Battery i.e., Electra Battery and Intact Financial go up and down completely randomly.
Pair Corralation between Electra Battery and Intact Financial
Assuming the 90 days trading horizon Electra Battery Materials is expected to under-perform the Intact Financial. In addition to that, Electra Battery is 6.82 times more volatile than Intact Financial. It trades about -0.01 of its total potential returns per unit of risk. Intact Financial is currently generating about 0.08 per unit of volatility. If you would invest 19,290 in Intact Financial on August 27, 2024 and sell it today you would earn a total of 7,878 from holding Intact Financial or generate 40.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electra Battery Materials vs. Intact Financial
Performance |
| Timeline |
| Electra Battery Materials |
| Intact Financial |
Electra Battery and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electra Battery and Intact Financial
The main advantage of trading using opposite Electra Battery and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electra Battery 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.| Electra Battery vs. Frontier Lithium | Electra Battery vs. Electra Battery Materials | Electra Battery vs. E3 Lithium | Electra Battery vs. Canada Nickel |
| Intact Financial vs. iA Financial | Intact Financial vs. Thomson Reuters Corp | Intact Financial vs. Metro Inc | Intact Financial vs. Waste Connections |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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