Correlation Between IGM Financial and Neptune Digital
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Neptune Digital 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 Neptune Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Neptune Digital Assets, you can compare the effects of market volatilities on IGM Financial and Neptune Digital 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 Neptune Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Neptune Digital.
Diversification Opportunities for IGM Financial and Neptune Digital
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between IGM and Neptune is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Neptune Digital Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neptune Digital Assets 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 Neptune Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neptune Digital Assets has no effect on the direction of IGM Financial i.e., IGM Financial and Neptune Digital go up and down completely randomly.
Pair Corralation between IGM Financial and Neptune Digital
Assuming the 90 days trading horizon IGM Financial is expected to under-perform the Neptune Digital. But the stock apears to be less risky and, when comparing its historical volatility, IGM Financial is 8.73 times less risky than Neptune Digital. The stock trades about -0.04 of its potential returns per unit of risk. The Neptune Digital Assets is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 69.00 in Neptune Digital Assets on October 26, 2024 and sell it today you would earn a total of 100.00 from holding Neptune Digital Assets or generate 144.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Neptune Digital Assets
Performance |
| Timeline |
| IGM Financial |
| Neptune Digital Assets |
IGM Financial and Neptune Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Neptune Digital
The main advantage of trading using opposite IGM Financial and Neptune Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Neptune Digital 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 Neptune Digital will offset losses from the drop in Neptune Digital's long position.| IGM Financial vs. CI Financial Corp | IGM Financial vs. Great West Lifeco | IGM Financial vs. iA Financial | IGM Financial vs. Power |
| Neptune Digital vs. Orbit Garant Drilling | Neptune Digital vs. Income Financial Trust | Neptune Digital vs. Rocky Mountain Liquor | Neptune Digital 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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