Correlation Between Great Wes and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Great Wes 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 Great Wes and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wes 515 and Intact Financial Corp, you can compare the effects of market volatilities on Great Wes 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 Great Wes with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wes and Intact Financial.
Diversification Opportunities for Great Wes and Intact Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Great and Intact is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Great Wes 515 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 Great Wes 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 Great Wes 515 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 Great Wes i.e., Great Wes and Intact Financial go up and down completely randomly.
Pair Corralation between Great Wes and Intact Financial
Assuming the 90 days trading horizon Great Wes 515 is expected to generate 0.74 times more return on investment than Intact Financial. However, Great Wes 515 is 1.35 times less risky than Intact Financial. It trades about 0.15 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 1,653 in Great Wes 515 on August 25, 2024 and sell it today you would earn a total of 482.00 from holding Great Wes 515 or generate 29.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
Great Wes 515 vs. Intact Financial Corp
Performance |
| Timeline |
| Great Wes 515 |
| Intact Financial Corp |
Great Wes and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wes and Intact Financial
The main advantage of trading using opposite Great Wes and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wes 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.| Great Wes vs. Birchtech Corp | Great Wes vs. CVW CleanTech | Great Wes vs. Rogers Communications | Great Wes vs. Sangoma Technologies Corp |
| Intact Financial vs. Intact Financial Corp | Intact Financial vs. Great West Lifeco | Intact Financial vs. Great Wes 515 | Intact Financial vs. Power Financial Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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