Correlation Between IGM Financial and Orbit Garant
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Orbit Garant 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 Orbit Garant into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Orbit Garant Drilling, you can compare the effects of market volatilities on IGM Financial and Orbit Garant 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 Orbit Garant. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Orbit Garant.
Diversification Opportunities for IGM Financial and Orbit Garant
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IGM and Orbit is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Orbit Garant Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbit Garant Drilling 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 Orbit Garant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbit Garant Drilling has no effect on the direction of IGM Financial i.e., IGM Financial and Orbit Garant go up and down completely randomly.
Pair Corralation between IGM Financial and Orbit Garant
Assuming the 90 days trading horizon IGM Financial is expected to generate 1.31 times less return on investment than Orbit Garant. But when comparing it to its historical volatility, IGM Financial is 3.97 times less risky than Orbit Garant. It trades about 0.23 of its potential returns per unit of risk. Orbit Garant Drilling is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 65.00 in Orbit Garant Drilling on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Orbit Garant Drilling or generate 30.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Orbit Garant Drilling
Performance |
| Timeline |
| IGM Financial |
| Orbit Garant Drilling |
IGM Financial and Orbit Garant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Orbit Garant
The main advantage of trading using opposite IGM Financial and Orbit Garant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Orbit Garant 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 Orbit Garant will offset losses from the drop in Orbit Garant's long position.| IGM Financial vs. CI Financial Corp | IGM Financial vs. Great West Lifeco | IGM Financial vs. iA Financial | IGM Financial vs. Power |
| Orbit Garant vs. Algoma Steel Group | Orbit Garant vs. Champion Iron | Orbit Garant vs. International Zeolite Corp | Orbit Garant vs. European Residential Real |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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