Correlation Between Waste Connections and Intact Financial
Can any of the company-specific risk be diversified away by investing in both Waste Connections 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 Waste Connections and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Waste Connections and Intact Financial, you can compare the effects of market volatilities on Waste Connections 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 Waste Connections with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waste Connections and Intact Financial.
Diversification Opportunities for Waste Connections and Intact Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Waste and Intact is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Waste Connections and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Waste Connections 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 Waste Connections 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 Waste Connections i.e., Waste Connections and Intact Financial go up and down completely randomly.
Pair Corralation between Waste Connections and Intact Financial
Assuming the 90 days trading horizon Waste Connections is expected to generate 0.98 times more return on investment than Intact Financial. However, Waste Connections is 1.02 times less risky than Intact Financial. It trades about 0.46 of its potential returns per unit of risk. Intact Financial is currently generating about -0.04 per unit of risk. If you would invest 24,581 in Waste Connections on August 28, 2024 and sell it today you would earn a total of 2,362 from holding Waste Connections or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Waste Connections vs. Intact Financial
Performance |
| Timeline |
| Waste Connections |
| Intact Financial |
Waste Connections and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Waste Connections and Intact Financial
The main advantage of trading using opposite Waste Connections and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Waste Connections 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.| Waste Connections vs. Thomson Reuters Corp | Waste Connections vs. TFI International | Waste Connections vs. CCL Industries | Waste Connections vs. Open Text Corp |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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