Correlation Between IGM Financial and Ramp Metals
Can any of the company-specific risk be diversified away by investing in both IGM Financial and Ramp Metals 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 Ramp Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGM Financial and Ramp Metals, you can compare the effects of market volatilities on IGM Financial and Ramp Metals 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 Ramp Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Ramp Metals.
Diversification Opportunities for IGM Financial and Ramp Metals
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between IGM and Ramp is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Ramp Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramp 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 Ramp Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramp Metals has no effect on the direction of IGM Financial i.e., IGM Financial and Ramp Metals go up and down completely randomly.
Pair Corralation between IGM Financial and Ramp Metals
Assuming the 90 days trading horizon IGM Financial is expected to under-perform the Ramp Metals. But the stock apears to be less risky and, when comparing its historical volatility, IGM Financial is 3.69 times less risky than Ramp Metals. The stock trades about -0.01 of its potential returns per unit of risk. The Ramp Metals is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 76.00 in Ramp Metals on October 28, 2024 and sell it today you would earn a total of 34.00 from holding Ramp Metals or generate 44.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGM Financial vs. Ramp Metals
Performance |
| Timeline |
| IGM Financial |
| Ramp Metals |
IGM Financial and Ramp Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGM Financial and Ramp Metals
The main advantage of trading using opposite IGM Financial and Ramp Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGM Financial position performs unexpectedly, Ramp Metals 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 Ramp Metals will offset losses from the drop in Ramp Metals' long position.| IGM Financial vs. CI Financial Corp | IGM Financial vs. Great West Lifeco | IGM Financial vs. iA Financial | IGM Financial vs. Power |
| Ramp Metals vs. Rogers Communications | Ramp Metals vs. Algoma Steel Group | Ramp Metals vs. AGF Management Limited | Ramp Metals vs. Champion Iron |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |