Correlation Between Intact Financial and Renoworks Software
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Renoworks Software 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 Renoworks Software 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 Renoworks Software, you can compare the effects of market volatilities on Intact Financial and Renoworks Software 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 Renoworks Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Renoworks Software.
Diversification Opportunities for Intact Financial and Renoworks Software
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intact and Renoworks is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Renoworks Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renoworks Software 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 Renoworks Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renoworks Software has no effect on the direction of Intact Financial i.e., Intact Financial and Renoworks Software go up and down completely randomly.
Pair Corralation between Intact Financial and Renoworks Software
Assuming the 90 days trading horizon Intact Financial is expected to generate 54.5 times less return on investment than Renoworks Software. But when comparing it to its historical volatility, Intact Financial Corp is 6.48 times less risky than Renoworks Software. It trades about 0.04 of its potential returns per unit of risk. Renoworks Software is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Renoworks Software on August 25, 2024 and sell it today you would earn a total of 14.00 from holding Renoworks Software or generate 77.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial Corp vs. Renoworks Software
Performance |
| Timeline |
| Intact Financial Corp |
| Renoworks Software |
Intact Financial and Renoworks Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Renoworks Software
The main advantage of trading using opposite Intact Financial and Renoworks Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Renoworks Software 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 Renoworks Software will offset losses from the drop in Renoworks Software'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 |
| Renoworks Software vs. Slate Grocery REIT | Renoworks Software vs. Roots Corp | Renoworks Software vs. Aimia Inc | Renoworks Software vs. Tucows Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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