Correlation Between Intact Financial and Champion Bear
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Champion Bear 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 Champion Bear 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 Champion Bear Resources, you can compare the effects of market volatilities on Intact Financial and Champion Bear 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 Champion Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Champion Bear.
Diversification Opportunities for Intact Financial and Champion Bear
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intact and Champion is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Champion Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Bear Resources 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 Champion Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Bear Resources has no effect on the direction of Intact Financial i.e., Intact Financial and Champion Bear go up and down completely randomly.
Pair Corralation between Intact Financial and Champion Bear
Assuming the 90 days trading horizon Intact Financial is expected to generate 12.64 times less return on investment than Champion Bear. But when comparing it to its historical volatility, Intact Financial Corp is 19.79 times less risky than Champion Bear. It trades about 0.1 of its potential returns per unit of risk. Champion Bear Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Champion Bear Resources on September 4, 2024 and sell it today you would lose (3.00) from holding Champion Bear Resources or give up 33.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Intact Financial Corp vs. Champion Bear Resources
Performance |
| Timeline |
| Intact Financial Corp |
| Champion Bear Resources |
Intact Financial and Champion Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Champion Bear
The main advantage of trading using opposite Intact Financial and Champion Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Champion Bear 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 Champion Bear will offset losses from the drop in Champion Bear's long position.| Intact Financial vs. Apple Inc CDR | Intact Financial vs. Microsoft Corp CDR | Intact Financial vs. Amazon CDR | Intact Financial vs. Alphabet Inc CDR |
| Champion Bear vs. First Majestic Silver | Champion Bear vs. Ivanhoe Energy | Champion Bear vs. Orezone Gold Corp | Champion Bear vs. Faraday Copper 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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