Correlation Between Intact Financial and Magnum Goldcorp
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Magnum Goldcorp 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 Magnum Goldcorp 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 Magnum Goldcorp, you can compare the effects of market volatilities on Intact Financial and Magnum Goldcorp 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 Magnum Goldcorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Magnum Goldcorp.
Diversification Opportunities for Intact Financial and Magnum Goldcorp
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intact and Magnum is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Magnum Goldcorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnum Goldcorp 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 Magnum Goldcorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnum Goldcorp has no effect on the direction of Intact Financial i.e., Intact Financial and Magnum Goldcorp go up and down completely randomly.
Pair Corralation between Intact Financial and Magnum Goldcorp
Assuming the 90 days trading horizon Intact Financial is expected to generate 14.73 times less return on investment than Magnum Goldcorp. But when comparing it to its historical volatility, Intact Financial Corp is 21.08 times less risky than Magnum Goldcorp. It trades about 0.08 of its potential returns per unit of risk. Magnum Goldcorp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Magnum Goldcorp on November 28, 2024 and sell it today you would lose (8.50) from holding Magnum Goldcorp or give up 70.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial Corp vs. Magnum Goldcorp
Performance |
| Timeline |
| Intact Financial Corp |
| Magnum Goldcorp |
Intact Financial and Magnum Goldcorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Magnum Goldcorp
The main advantage of trading using opposite Intact Financial and Magnum Goldcorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Magnum Goldcorp 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 Magnum Goldcorp will offset losses from the drop in Magnum Goldcorp'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 |
| Magnum Goldcorp vs. XXIX Metal Corp | Magnum Goldcorp vs. Perseus Mining | Magnum Goldcorp vs. GoldQuest Mining Corp | Magnum Goldcorp vs. McEwen Mining |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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