Correlation Between Intact Financial and Inovalis Real
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Inovalis Real 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 Inovalis Real 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 Inovalis Real Estate, you can compare the effects of market volatilities on Intact Financial and Inovalis Real 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 Inovalis Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Inovalis Real.
Diversification Opportunities for Intact Financial and Inovalis Real
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intact and Inovalis is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Inovalis Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inovalis Real Estate 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 Inovalis Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inovalis Real Estate has no effect on the direction of Intact Financial i.e., Intact Financial and Inovalis Real go up and down completely randomly.
Pair Corralation between Intact Financial and Inovalis Real
Assuming the 90 days trading horizon Intact Financial is expected to generate 1.23 times less return on investment than Inovalis Real. But when comparing it to its historical volatility, Intact Financial Corp is 4.93 times less risky than Inovalis Real. It trades about 0.23 of its potential returns per unit of risk. Inovalis Real Estate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 82.00 in Inovalis Real Estate on September 12, 2024 and sell it today you would earn a total of 2.00 from holding Inovalis Real Estate or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Intact Financial Corp vs. Inovalis Real Estate
Performance |
| Timeline |
| Intact Financial Corp |
| Inovalis Real Estate |
Intact Financial and Inovalis Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Inovalis Real
The main advantage of trading using opposite Intact Financial and Inovalis Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Inovalis Real 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 Inovalis Real will offset losses from the drop in Inovalis Real's 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 |
| Inovalis Real vs. Costco Wholesale Corp | Inovalis Real vs. A W FOOD | Inovalis Real vs. Verizon Communications CDR | Inovalis Real vs. Lion One Metals |
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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