Correlation Between Intact Financial and Plata Latina
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Plata Latina 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 Plata Latina 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 Plata Latina Minerals, you can compare the effects of market volatilities on Intact Financial and Plata Latina 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 Plata Latina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Plata Latina.
Diversification Opportunities for Intact Financial and Plata Latina
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intact and Plata is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Plata Latina Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plata Latina Minerals 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 Plata Latina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plata Latina Minerals has no effect on the direction of Intact Financial i.e., Intact Financial and Plata Latina go up and down completely randomly.
Pair Corralation between Intact Financial and Plata Latina
Assuming the 90 days trading horizon Intact Financial is expected to generate 34.33 times less return on investment than Plata Latina. But when comparing it to its historical volatility, Intact Financial Corp is 42.4 times less risky than Plata Latina. It trades about 0.12 of its potential returns per unit of risk. Plata Latina Minerals is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1.00 in Plata Latina Minerals on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Plata Latina Minerals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Intact Financial Corp vs. Plata Latina Minerals
Performance |
| Timeline |
| Intact Financial Corp |
| Plata Latina Minerals |
Intact Financial and Plata Latina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Plata Latina
The main advantage of trading using opposite Intact Financial and Plata Latina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Plata Latina 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 Plata Latina will offset losses from the drop in Plata Latina's long position.| Intact Financial vs. Walmart Inc CDR | Intact Financial vs. Amazon CDR | Intact Financial vs. Berkshire Hathaway CDR | Intact Financial vs. UnitedHealth Group CDR |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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