Correlation Between IGM Financial and Dividend

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

By analyzing existing cross correlation between IGM Financial and Dividend 15 Split, you can compare the effects of market volatilities on IGM Financial and 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 IGM Financial with a short position of Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGM Financial and Dividend.

Diversification Opportunities for IGM Financial and Dividend

-0.15

Correlation Coefficient

IGM Financial  Dividend

Good diversification

The 3 months correlation between IGM and Dividend is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Dividend 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dividend 15 Split and IGM 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 IGM Financial are associated (or correlated) with Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dividend 15 Split has no effect on the direction of IGM Financial i.e., IGM Financial and Dividend go up and down completely randomly.

Pair Corralation between IGM Financial and Dividend

Assuming the 90 days trading horizon IGM Financial is expected to under-perform the Dividend. In addition to that, IGM Financial is 2.65 times more volatile than Dividend 15 Split. It trades about -0.02 of its total potential returns per unit of risk. Dividend 15 Split is currently generating about 0.06 per unit of volatility. If you would invest  1,068  in Dividend 15 Split on December 21, 2024 and sell it today you would earn a total of  19.00  from holding Dividend 15 Split or generate 1.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

IGM Financial  vs.  Dividend 15 Split

IGM Financial

Risk-Adjusted Performance

Very Weak

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

Dividend 15 Split

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Dividend 15 Split are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Dividend is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with IGM Financial and Dividend

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

The idea behind IGM Financial and Dividend 15 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.