Correlation Between IA Financial and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both IA Financial and NeXGold Mining 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 NeXGold Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and NeXGold Mining Corp, you can compare the effects of market volatilities on IA Financial and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and NeXGold Mining.
Diversification Opportunities for IA Financial and NeXGold Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IAG and NeXGold is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of IA Financial i.e., IA Financial and NeXGold Mining go up and down completely randomly.
Pair Corralation between IA Financial and NeXGold Mining
Assuming the 90 days trading horizon iA Financial is expected to generate 0.45 times more return on investment than NeXGold Mining. However, iA Financial is 2.23 times less risky than NeXGold Mining. It trades about 0.2 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.05 per unit of risk. If you would invest 8,757 in iA Financial on September 2, 2024 and sell it today you would earn a total of 4,626 from holding iA Financial or generate 52.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iA Financial vs. NeXGold Mining Corp
Performance |
| Timeline |
| iA Financial |
| NeXGold Mining Corp |
IA Financial and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IA Financial and NeXGold Mining
The main advantage of trading using opposite IA Financial and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining'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 |
| NeXGold Mining vs. Royal Bank of | NeXGold Mining vs. Canso Credit Trust | NeXGold Mining vs. CI Financial Corp | NeXGold Mining vs. Olympia Financial Group |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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