Correlation Between Intact Financial and NeXGold Mining
Can any of the company-specific risk be diversified away by investing in both Intact Financial and NeXGold Mining 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 NeXGold Mining 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 NeXGold Mining Corp, you can compare the effects of market volatilities on Intact Financial and NeXGold Mining 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 NeXGold Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and NeXGold Mining.
Diversification Opportunities for Intact Financial and NeXGold Mining
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intact and NeXGold is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and NeXGold Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeXGold Mining Corp 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 NeXGold Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeXGold Mining Corp has no effect on the direction of Intact Financial i.e., Intact Financial and NeXGold Mining go up and down completely randomly.
Pair Corralation between Intact Financial and NeXGold Mining
Assuming the 90 days trading horizon Intact Financial Corp is expected to generate 0.25 times more return on investment than NeXGold Mining. However, Intact Financial Corp is 4.06 times less risky than NeXGold Mining. It trades about -0.13 of its potential returns per unit of risk. NeXGold Mining Corp is currently generating about -0.12 per unit of risk. If you would invest 2,433 in Intact Financial Corp on October 16, 2024 and sell it today you would lose (33.00) from holding Intact Financial Corp or give up 1.36% 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. NeXGold Mining Corp
Performance |
| Timeline |
| Intact Financial Corp |
| NeXGold Mining Corp |
Intact Financial and NeXGold Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and NeXGold Mining
The main advantage of trading using opposite Intact Financial and NeXGold Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, NeXGold Mining 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 NeXGold Mining will offset losses from the drop in NeXGold Mining'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 |
| NeXGold Mining vs. Bird Construction | NeXGold Mining vs. Primaris Retail RE | NeXGold Mining vs. Sun Peak Metals | NeXGold Mining vs. CNJ Capital Investments |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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