Correlation Between Intact Financial and Calibre Mining

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

By analyzing existing cross correlation between Intact Financial and Calibre Mining Corp, you can compare the effects of market volatilities on Intact Financial and Calibre Mining 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 Calibre Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Calibre Mining.

Diversification Opportunities for Intact Financial and Calibre Mining

-0.49

Correlation Coefficient

Intact Financial  Calibre Mining

Very good diversification

The 3 months correlation between Intact and Calibre is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Intact Financial i.e., Intact Financial and Calibre Mining go up and down completely randomly.

Pair Corralation between Intact Financial and Calibre Mining

Assuming the 90 days trading horizon Intact Financial is expected to generate 0.38 times more return on investment than Calibre Mining. However, Intact Financial is 2.65 times less risky than Calibre Mining. It trades about 0.06 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.07 per unit of risk. If you would invest  25,068  in Intact Financial on September 19, 2024 and sell it today you would earn a total of  940.00  from holding Intact Financial or generate 3.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Intact Financial  vs.  Calibre Mining Corp

Intact Financial

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Intact Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental drivers remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Intact Financial and Calibre Mining

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

The idea behind Intact Financial and Calibre Mining Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..