Correlation Between IA Financial and Black Widow

Can any of the company-specific risk be diversified away by investing in both IA Financial and Black Widow 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 IA Financial and Black Widow into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iA Financial and Black Widow Resources, you can compare the effects of market volatilities on IA Financial and Black Widow 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 IA Financial with a short position of Black Widow. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and Black Widow.

Diversification Opportunities for IA Financial and Black Widow

0.21

Correlation Coefficient

IA Financial  Black Widow

Modest diversification

The 3 months correlation between IAG and Black is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and Black Widow Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Widow Resources and IA 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 iA Financial are associated (or correlated) with Black Widow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Widow Resources has no effect on the direction of IA Financial i.e., IA Financial and Black Widow go up and down completely randomly.

Pair Corralation between IA Financial and Black Widow

If you would invest  12,980  in iA Financial on December 19, 2024 and sell it today you would lose (60.00) from holding iA Financial or give up 0.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

iA Financial  vs.  Black Widow Resources

iA Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days iA Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, IA Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Black Widow Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Black Widow Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Black Widow is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with IA Financial and Black Widow

The main advantage of trading using opposite IA Financial and Black Widow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, Black Widow 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 Black Widow will offset losses from the drop in Black Widow's long position.

The idea behind iA Financial and Black Widow Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.