Correlation Between IGM Financial and Alaska Energy
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Alaska 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 IGM Financial and Alaska Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Alaska Energy Metals, you can compare the effects of market volatilities on IGM Financial and Alaska 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 IGM Financial with a short position of Alaska Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Alaska Energy.
Diversification Opportunities for IGM Financial and Alaska Energy
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IGM and Alaska is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Alaska Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alaska Energy Metals 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 Alaska Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alaska Energy Metals has no effect on the direction of IGM Financial i.e., IGM Financial and Alaska Energy go up and down completely randomly.
Pair Corralation between IGM Financial and Alaska Energy
Assuming the 90 days trading horizon IGM Financial is expected to generate 0.14 times more return on investment than Alaska Energy. However, IGM Financial is 6.99 times less risky than Alaska Energy. It trades about 0.31 of its potential returns per unit of risk. Alaska Energy Metals is currently generating about -0.21 per unit of risk. If you would invest 4,563 in IGM Financial on September 15, 2024 and sell it today you would earn a total of 197.00 from holding IGM Financial or generate 4.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Alaska Energy Metals
Performance |
| Timeline |
| IGM Financial |
| Alaska Energy Metals |
IGM Financial and Alaska Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Alaska Energy
The main advantage of trading using opposite IGM Financial and Alaska Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Alaska 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 Alaska Energy will offset losses from the drop in Alaska Energy's long position.| IGM Financial vs. CI Financial Corp | IGM Financial vs. Great West Lifeco | IGM Financial vs. iA Financial | IGM Financial vs. Power |
| Alaska Energy vs. Olympia Financial Group | Alaska Energy vs. First National Financial | Alaska Energy vs. National Bank of | Alaska Energy vs. IGM Financial |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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