Correlation Between IA Financial and Great West
Can any of the company-specific risk be diversified away by investing in both IA Financial and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and Great West Lifeco, you can compare the effects of market volatilities on IA Financial and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and Great West.
Diversification Opportunities for IA Financial and Great West
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IAG and Great is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of IA Financial i.e., IA Financial and Great West go up and down completely randomly.
Pair Corralation between IA Financial and Great West
Assuming the 90 days trading horizon iA Financial is expected to generate 1.62 times more return on investment than Great West. However, IA Financial is 1.62 times more volatile than Great West Lifeco. It trades about 0.08 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.09 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 Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iA Financial vs. Great West Lifeco
Performance |
| Timeline |
| iA Financial |
| Great West Lifeco |
IA Financial and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and Great West
The main advantage of trading using opposite IA Financial and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West'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 |
| Great West vs. Sun Life Financial | Great West vs. Power | Great West vs. Manulife Financial Corp | Great West vs. National Bank of |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stocks Directory Find actively traded stocks across global markets |