Correlation Between Forsys Metals and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Forsys 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 Forsys 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 Forsys Metals Corp and Intact Financial, you can compare the effects of market volatilities on Forsys 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 Forsys Metals with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forsys Metals and Intact Financial.
Diversification Opportunities for Forsys Metals and Intact Financial
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Forsys and Intact is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Forsys Metals Corp and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Forsys 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 Forsys 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 has no effect on the direction of Forsys Metals i.e., Forsys Metals and Intact Financial go up and down completely randomly.
Pair Corralation between Forsys Metals and Intact Financial
Assuming the 90 days trading horizon Forsys Metals Corp is expected to under-perform the Intact Financial. In addition to that, Forsys Metals is 6.25 times more volatile than Intact Financial. It trades about 0.0 of its total potential returns per unit of risk. Intact Financial is currently generating about 0.13 per unit of volatility. If you would invest 22,219 in Intact Financial on August 27, 2024 and sell it today you would earn a total of 4,949 from holding Intact Financial or generate 22.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forsys Metals Corp vs. Intact Financial
Performance |
| Timeline |
| Forsys Metals Corp |
| Intact Financial |
Forsys Metals and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forsys Metals and Intact Financial
The main advantage of trading using opposite Forsys Metals and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forsys 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.| Forsys Metals vs. Laramide Resources | Forsys Metals vs. enCore Energy Corp | Forsys Metals vs. CanAlaska Uranium | Forsys Metals vs. Anfield Resources |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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