Correlation Between Northview Residential and IA Financial
Can any of the company-specific risk be diversified away by investing in both Northview Residential and IA Financial 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 Northview Residential and IA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northview Residential REIT and iA Financial, you can compare the effects of market volatilities on Northview Residential and IA Financial 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 Northview Residential with a short position of IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and IA Financial.
Diversification Opportunities for Northview Residential and IA Financial
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Northview and IAG is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial and Northview Residential 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 Northview Residential REIT are associated (or correlated) with IA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iA Financial has no effect on the direction of Northview Residential i.e., Northview Residential and IA Financial go up and down completely randomly.
Pair Corralation between Northview Residential and IA Financial
Assuming the 90 days trading horizon Northview Residential is expected to generate 10.02 times less return on investment than IA Financial. In addition to that, Northview Residential is 1.52 times more volatile than iA Financial. It trades about 0.01 of its total potential returns per unit of risk. iA Financial is currently generating about 0.09 per unit of volatility. If you would invest 8,400 in iA Financial on August 31, 2024 and sell it today you would earn a total of 4,913 from holding iA Financial or generate 58.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.49% |
| Values | Daily Returns |
Northview Residential REIT vs. iA Financial
Performance |
| Timeline |
| Northview Residential |
| iA Financial |
Northview Residential and IA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northview Residential and IA Financial
The main advantage of trading using opposite Northview Residential and IA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northview Residential position performs unexpectedly, IA Financial 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 IA Financial will offset losses from the drop in IA Financial's long position.| Northview Residential vs. Stampede Drilling | Northview Residential vs. TUT Fitness Group | Northview Residential vs. Algoma Steel Group | Northview Residential vs. Maple Leaf Foods |
| IA Financial vs. Great West Lifeco | IA Financial vs. Intact Financial | IA Financial vs. IGM Financial | IA Financial vs. Sun Life 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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