Correlation Between Intact Financial and Baylin Technologies
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Baylin Technologies 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 Baylin Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intact Financial and Baylin Technologies, you can compare the effects of market volatilities on Intact Financial and Baylin Technologies 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 Baylin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Baylin Technologies.
Diversification Opportunities for Intact Financial and Baylin Technologies
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intact and Baylin is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Baylin Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baylin Technologies 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 are associated (or correlated) with Baylin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baylin Technologies has no effect on the direction of Intact Financial i.e., Intact Financial and Baylin Technologies go up and down completely randomly.
Pair Corralation between Intact Financial and Baylin Technologies
Assuming the 90 days trading horizon Intact Financial is expected to generate 0.13 times more return on investment than Baylin Technologies. However, Intact Financial is 7.55 times less risky than Baylin Technologies. It trades about -0.04 of its potential returns per unit of risk. Baylin Technologies is currently generating about -0.12 per unit of risk. If you would invest 26,958 in Intact Financial on August 27, 2024 and sell it today you would lose (258.00) from holding Intact Financial or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial vs. Baylin Technologies
Performance |
| Timeline |
| Intact Financial |
| Baylin Technologies |
Intact Financial and Baylin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Baylin Technologies
The main advantage of trading using opposite Intact Financial and Baylin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Baylin Technologies 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 Baylin Technologies will offset losses from the drop in Baylin Technologies' long position.| Intact Financial vs. iA Financial | Intact Financial vs. Thomson Reuters Corp | Intact Financial vs. Metro Inc | Intact Financial vs. Waste Connections |
| Baylin Technologies vs. Current Water Technologies | Baylin Technologies vs. Sparta Capital | Baylin Technologies vs. Fintech Select | Baylin Technologies vs. iShares Canadian HYBrid |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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