Correlation Between Intact Financial and Element Fleet
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Element Fleet 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 Element Fleet 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 Element Fleet Management, you can compare the effects of market volatilities on Intact Financial and Element Fleet 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 Element Fleet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Element Fleet.
Diversification Opportunities for Intact Financial and Element Fleet
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intact and Element is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Element Fleet Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Fleet Management 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 Element Fleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Fleet Management has no effect on the direction of Intact Financial i.e., Intact Financial and Element Fleet go up and down completely randomly.
Pair Corralation between Intact Financial and Element Fleet
Assuming the 90 days trading horizon Intact Financial is expected to generate 1.22 times less return on investment than Element Fleet. But when comparing it to its historical volatility, Intact Financial Corp is 1.92 times less risky than Element Fleet. It trades about 0.1 of its potential returns per unit of risk. Element Fleet Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,820 in Element Fleet Management on September 12, 2024 and sell it today you would earn a total of 120.00 from holding Element Fleet Management or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial Corp vs. Element Fleet Management
Performance |
| Timeline |
| Intact Financial Corp |
| Element Fleet Management |
Intact Financial and Element Fleet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Element Fleet
The main advantage of trading using opposite Intact Financial and Element Fleet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Element Fleet 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 Element Fleet will offset losses from the drop in Element Fleet's long position.| Intact Financial vs. Brookfield Infrastructure Partners | Intact Financial vs. Brookfield Infrastructure Partners | Intact Financial vs. iShares Canadian HYBrid | Intact Financial vs. Solar Alliance Energy |
| Element Fleet vs. Current Water Technologies | Element Fleet vs. Plurilock Security | Element Fleet vs. PowerBand Solutions | Element Fleet vs. iShares Canadian HYBrid |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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