Correlation Between IGM Financial and Questor Technology
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Questor Technology 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 Questor Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Questor Technology, you can compare the effects of market volatilities on IGM Financial and Questor Technology 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 Questor Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Questor Technology.
Diversification Opportunities for IGM Financial and Questor Technology
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IGM and Questor is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Questor Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Questor Technology 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 Questor Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Questor Technology has no effect on the direction of IGM Financial i.e., IGM Financial and Questor Technology go up and down completely randomly.
Pair Corralation between IGM Financial and Questor Technology
Assuming the 90 days trading horizon IGM Financial is expected to generate 0.3 times more return on investment than Questor Technology. However, IGM Financial is 3.32 times less risky than Questor Technology. It trades about 0.05 of its potential returns per unit of risk. Questor Technology is currently generating about -0.04 per unit of risk. If you would invest 3,565 in IGM Financial on September 30, 2024 and sell it today you would earn a total of 1,111 from holding IGM Financial or generate 31.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Questor Technology
Performance |
| Timeline |
| IGM Financial |
| Questor Technology |
IGM Financial and Questor Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Questor Technology
The main advantage of trading using opposite IGM Financial and Questor Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Questor Technology 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 Questor Technology will offset losses from the drop in Questor Technology's long position.| IGM Financial vs. Berkshire Hathaway CDR | IGM Financial vs. JPMorgan Chase Co | IGM Financial vs. Bank of America | IGM Financial vs. Alphabet Inc CDR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |