Correlation Between Intact Financial and Advent Wireless
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Advent Wireless 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 Intact Financial and Advent Wireless into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intact Financial Corp and Advent Wireless, you can compare the effects of market volatilities on Intact Financial and Advent Wireless 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 Intact Financial with a short position of Advent Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Advent Wireless.
Diversification Opportunities for Intact Financial and Advent Wireless
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intact and Advent is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Advent Wireless in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advent Wireless and Intact 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 Intact Financial Corp are associated (or correlated) with Advent Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advent Wireless has no effect on the direction of Intact Financial i.e., Intact Financial and Advent Wireless go up and down completely randomly.
Pair Corralation between Intact Financial and Advent Wireless
Assuming the 90 days trading horizon Intact Financial is expected to generate 17.24 times less return on investment than Advent Wireless. But when comparing it to its historical volatility, Intact Financial Corp is 10.26 times less risky than Advent Wireless. It trades about 0.13 of its potential returns per unit of risk. Advent Wireless is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Advent Wireless on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Advent Wireless or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial Corp vs. Advent Wireless
Performance |
| Timeline |
| Intact Financial Corp |
| Advent Wireless |
Intact Financial and Advent Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Advent Wireless
The main advantage of trading using opposite Intact Financial and Advent Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Advent Wireless 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 Advent Wireless will offset losses from the drop in Advent Wireless' long position.| Intact Financial vs. Intact Financial Corp | Intact Financial vs. National Bank of | Intact Financial vs. Fairfax Financial Holdings | Intact Financial vs. Fairfax Financial Holdings |
| Advent Wireless vs. DelphX Capital Markets | Advent Wireless vs. Citadel Income | Advent Wireless vs. iShares Canadian HYBrid | Advent Wireless vs. Altagas Cum Red |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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