Correlation Between Equity Metals and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Equity Metals 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 Equity Metals and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Metals Corp and Intact Financial Corp, you can compare the effects of market volatilities on Equity Metals 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 Equity Metals with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Metals and Intact Financial.
Diversification Opportunities for Equity Metals and Intact Financial
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Equity and Intact is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Equity Metals Corp 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 Equity Metals 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 Equity Metals Corp 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 Equity Metals i.e., Equity Metals and Intact Financial go up and down completely randomly.
Pair Corralation between Equity Metals and Intact Financial
Assuming the 90 days trading horizon Equity Metals Corp is expected to generate 7.33 times more return on investment than Intact Financial. However, Equity Metals is 7.33 times more volatile than Intact Financial Corp. It trades about 0.01 of its potential returns per unit of risk. Intact Financial Corp is currently generating about 0.04 per unit of risk. If you would invest 22.00 in Equity Metals Corp on September 1, 2024 and sell it today you would lose (4.00) from holding Equity Metals Corp or give up 18.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Metals Corp vs. Intact Financial Corp
Performance |
| Timeline |
| Equity Metals Corp |
| Intact Financial Corp |
Equity Metals and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Metals and Intact Financial
The main advantage of trading using opposite Equity Metals and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Metals 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.| Equity Metals vs. Minaurum Gold | Equity Metals vs. Dolly Varden Silver | Equity Metals vs. Santacruz Silv | Equity Metals vs. GoGold Resources |
| Intact Financial vs. Intact Financial Corp | Intact Financial vs. National Bank of | Intact Financial vs. Fairfax Financial Holdings | Intact Financial vs. Fairfax Financial Holdings |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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