Correlation Between IA Financial and Finning International
Can any of the company-specific risk be diversified away by investing in both IA Financial and Finning International 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 IA Financial and Finning International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and Finning International, you can compare the effects of market volatilities on IA Financial and Finning International 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 IA Financial with a short position of Finning International. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and Finning International.
Diversification Opportunities for IA Financial and Finning International
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IAG and Finning is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and Finning International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Finning International and IA Financial 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 iA Financial are associated (or correlated) with Finning International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Finning International has no effect on the direction of IA Financial i.e., IA Financial and Finning International go up and down completely randomly.
Pair Corralation between IA Financial and Finning International
Assuming the 90 days trading horizon iA Financial is expected to generate 0.86 times more return on investment than Finning International. However, iA Financial is 1.17 times less risky than Finning International. It trades about 0.08 of its potential returns per unit of risk. Finning International is currently generating about 0.02 per unit of risk. If you would invest 7,810 in iA Financial on November 2, 2024 and sell it today you would earn a total of 5,772 from holding iA Financial or generate 73.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iA Financial vs. Finning International
Performance |
| Timeline |
| iA Financial |
| Finning International |
IA Financial and Finning International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and Finning International
The main advantage of trading using opposite IA Financial and Finning International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, Finning International 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 Finning International will offset losses from the drop in Finning International's long position.| IA Financial vs. Great West Lifeco | IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life Financial |
| Finning International vs. Toromont Industries | Finning International vs. Ritchie Bros Auctioneers | Finning International vs. Stantec | Finning International vs. Transcontinental |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |