Correlation Between Intact Financial and Altagas Cum

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

By analyzing existing cross correlation between Intact Financial and Altagas Cum Red, you can compare the effects of market volatilities on Intact Financial and Altagas Cum 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 Intact Financial with a short position of Altagas Cum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Altagas Cum.

Diversification Opportunities for Intact Financial and Altagas Cum

0.11

Correlation Coefficient

Intact Financial  Altagas Cum

Average diversification

The 3 months correlation between Intact and Altagas is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Altagas Cum Red in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altagas Cum Red and Intact 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 Intact Financial are associated (or correlated) with Altagas Cum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altagas Cum Red has no effect on the direction of Intact Financial i.e., Intact Financial and Altagas Cum go up and down completely randomly.

Pair Corralation between Intact Financial and Altagas Cum

Assuming the 90 days trading horizon Intact Financial is expected to generate 1.37 times more return on investment than Altagas Cum. However, Intact Financial is 1.37 times more volatile than Altagas Cum Red. It trades about 0.11 of its potential returns per unit of risk. Altagas Cum Red is currently generating about 0.09 per unit of risk. If you would invest  25,316  in Intact Financial on September 13, 2024 and sell it today you would earn a total of  1,616  from holding Intact Financial or generate 6.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Intact Financial  vs.  Altagas Cum Red

Intact Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Intact Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Altagas Cum Red

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Altagas Cum Red are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Altagas Cum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intact Financial and Altagas Cum

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

The idea behind Intact Financial and Altagas Cum Red 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.