Correlation Between Intact Financial and T2 Metals
Can any of the company-specific risk be diversified away by investing in both Intact Financial and T2 Metals 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 T2 Metals 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 T2 Metals Corp, you can compare the effects of market volatilities on Intact Financial and T2 Metals 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 T2 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and T2 Metals.
Diversification Opportunities for Intact Financial and T2 Metals
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Intact and TWO is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and T2 Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T2 Metals 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 T2 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T2 Metals Corp has no effect on the direction of Intact Financial i.e., Intact Financial and T2 Metals go up and down completely randomly.
Pair Corralation between Intact Financial and T2 Metals
Assuming the 90 days trading horizon Intact Financial is expected to generate 2.42 times less return on investment than T2 Metals. But when comparing it to its historical volatility, Intact Financial Corp is 6.36 times less risky than T2 Metals. It trades about 0.05 of its potential returns per unit of risk. T2 Metals Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 25.00 in T2 Metals Corp on August 29, 2024 and sell it today you would lose (2.00) from holding T2 Metals Corp or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial Corp vs. T2 Metals Corp
Performance |
| Timeline |
| Intact Financial Corp |
| T2 Metals Corp |
Intact Financial and T2 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and T2 Metals
The main advantage of trading using opposite Intact Financial and T2 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, T2 Metals 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 T2 Metals will offset losses from the drop in T2 Metals' 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 |
| T2 Metals vs. First Majestic Silver | T2 Metals vs. Ivanhoe Energy | T2 Metals vs. Orezone Gold Corp | T2 Metals vs. Faraday Copper Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |