Correlation Between IA Financial and Infrastructure Dividend

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Can any of the company-specific risk be diversified away by investing in both IA Financial and Infrastructure Dividend 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 Infrastructure Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iA Financial and Infrastructure Dividend Split, you can compare the effects of market volatilities on IA Financial and Infrastructure Dividend 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 Infrastructure Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IA Financial and Infrastructure Dividend.

Diversification Opportunities for IA Financial and Infrastructure Dividend

-0.45
  Correlation Coefficient

Very good diversification

The 3 months correlation between IAG and Infrastructure is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding iA Financial and Infrastructure Dividend Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastructure Dividend 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 Infrastructure Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastructure Dividend has no effect on the direction of IA Financial i.e., IA Financial and Infrastructure Dividend go up and down completely randomly.

Pair Corralation between IA Financial and Infrastructure Dividend

Assuming the 90 days trading horizon iA Financial is expected to under-perform the Infrastructure Dividend. In addition to that, IA Financial is 1.34 times more volatile than Infrastructure Dividend Split. It trades about -0.28 of its total potential returns per unit of risk. Infrastructure Dividend Split is currently generating about -0.11 per unit of volatility. If you would invest  1,513  in Infrastructure Dividend Split on October 10, 2024 and sell it today you would lose (19.00) from holding Infrastructure Dividend Split or give up 1.26% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

iA Financial  vs.  Infrastructure Dividend Split

 Performance 
       Timeline  
iA Financial 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in iA Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, IA Financial displayed solid returns over the last few months and may actually be approaching a breakup point.
Infrastructure Dividend 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Infrastructure Dividend Split are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Infrastructure Dividend is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

IA Financial and Infrastructure Dividend Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IA Financial and Infrastructure Dividend

The main advantage of trading using opposite IA Financial and Infrastructure Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IA Financial position performs unexpectedly, Infrastructure Dividend 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 Infrastructure Dividend will offset losses from the drop in Infrastructure Dividend's long position.
The idea behind iA Financial and Infrastructure Dividend Split 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.
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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