Correlation Between Onex Corp and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Onex Corp and Intact 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 Onex Corp and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Onex Corp and Intact Financial, you can compare the effects of market volatilities on Onex Corp and Intact 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 Onex Corp with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Onex Corp and Intact Financial.
Diversification Opportunities for Onex Corp and Intact Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Onex and Intact is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Onex Corp and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Onex Corp 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 Onex Corp are associated (or correlated) with Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial has no effect on the direction of Onex Corp i.e., Onex Corp and Intact Financial go up and down completely randomly.
Pair Corralation between Onex Corp and Intact Financial
Assuming the 90 days trading horizon Onex Corp is expected to generate 2.08 times more return on investment than Intact Financial. However, Onex Corp is 2.08 times more volatile than Intact Financial. It trades about 0.33 of its potential returns per unit of risk. Intact Financial is currently generating about -0.01 per unit of risk. If you would invest 9,881 in Onex Corp on August 29, 2024 and sell it today you would earn a total of 1,512 from holding Onex Corp or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Onex Corp vs. Intact Financial
Performance |
| Timeline |
| Onex Corp |
| Intact Financial |
Onex Corp and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Onex Corp and Intact Financial
The main advantage of trading using opposite Onex Corp and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Onex Corp position performs unexpectedly, Intact 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 Intact Financial will offset losses from the drop in Intact Financial's long position.| Onex Corp vs. NVIDIA CDR | Onex Corp vs. Apple Inc CDR | Onex Corp vs. Microsoft Corp CDR | Onex Corp vs. Amazon CDR |
| Intact Financial vs. iA Financial | Intact Financial vs. Thomson Reuters Corp | Intact Financial vs. Metro Inc | Intact Financial vs. Waste Connections |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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