Correlation Between Intact Financial and Ur Energy
Can any of the company-specific risk be diversified away by investing in both Intact Financial and Ur Energy 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 Ur Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intact Financial and Ur Energy, you can compare the effects of market volatilities on Intact Financial and Ur Energy 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 Ur Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Ur Energy.
Diversification Opportunities for Intact Financial and Ur Energy
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intact and URE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Ur Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ur Energy 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 Ur Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ur Energy has no effect on the direction of Intact Financial i.e., Intact Financial and Ur Energy go up and down completely randomly.
Pair Corralation between Intact Financial and Ur Energy
Assuming the 90 days trading horizon Intact Financial is expected to under-perform the Ur Energy. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 3.02 times less risky than Ur Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Ur Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 173.00 in Ur Energy on September 2, 2024 and sell it today you would earn a total of 10.00 from holding Ur Energy or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intact Financial vs. Ur Energy
Performance |
| Timeline |
| Intact Financial |
| Ur Energy |
Intact Financial and Ur Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intact Financial and Ur Energy
The main advantage of trading using opposite Intact Financial and Ur Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intact Financial position performs unexpectedly, Ur Energy 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 Ur Energy will offset losses from the drop in Ur Energy's long position.| Intact Financial vs. iA Financial | Intact Financial vs. Thomson Reuters Corp | Intact Financial vs. Metro Inc | Intact Financial vs. Waste Connections |
| Ur Energy vs. Denison Mines Corp | Ur Energy vs. Energy Fuels | Ur Energy vs. Laramide Resources | Ur Energy vs. Mega Uranium |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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