Correlation Between IGM Financial and Adobe
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Adobe 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 IGM Financial and Adobe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Adobe Inc, you can compare the effects of market volatilities on IGM Financial and Adobe 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 IGM Financial with a short position of Adobe. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Adobe.
Diversification Opportunities for IGM Financial and Adobe
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between IGM and Adobe is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc and IGM 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 IGM Financial are associated (or correlated) with Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of IGM Financial i.e., IGM Financial and Adobe go up and down completely randomly.
Pair Corralation between IGM Financial and Adobe
Assuming the 90 days trading horizon IGM Financial is expected to generate 0.86 times more return on investment than Adobe. However, IGM Financial is 1.17 times less risky than Adobe. It trades about 0.06 of its potential returns per unit of risk. Adobe Inc is currently generating about -0.02 per unit of risk. If you would invest 4,592 in IGM Financial on November 3, 2024 and sell it today you would earn a total of 71.00 from holding IGM Financial or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Adobe Inc
Performance |
| Timeline |
| IGM Financial |
| Adobe Inc |
IGM Financial and Adobe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Adobe
The main advantage of trading using opposite IGM Financial and Adobe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Adobe 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 Adobe will offset losses from the drop in Adobe's long position.| IGM Financial vs. CI Financial Corp | IGM Financial vs. Great West Lifeco | IGM Financial vs. iA Financial | IGM Financial vs. Power |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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