Correlation Between Advanced Micro and IA Financial
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and IA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and iA Financial, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of IA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and IA Financial.
Diversification Opportunities for Advanced Micro and IA Financial
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and IAG is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and iA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iA Financial and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and IA Financial go up and down completely randomly.
Pair Corralation between Advanced Micro and IA Financial
Assuming the 90 days trading horizon Advanced Micro Devices is expected to under-perform the IA Financial. In addition to that, Advanced Micro is 1.19 times more volatile than iA Financial. It trades about -0.08 of its total potential returns per unit of risk. iA Financial is currently generating about 0.19 per unit of volatility. If you would invest 10,523 in iA Financial on September 14, 2024 and sell it today you would earn a total of 2,939 from holding iA Financial or generate 27.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Advanced Micro Devices vs. iA Financial
Performance |
Timeline |
Advanced Micro Devices |
iA Financial |
Advanced Micro and IA Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Advanced Micro and IA Financial
The main advantage of trading using opposite Advanced Micro and IA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.Advanced Micro vs. iA Financial | Advanced Micro vs. Bausch Health Companies | Advanced Micro vs. CVS HEALTH CDR | Advanced Micro vs. Jamieson Wellness |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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