Correlation Between Infrastructure Dividend and IGM Financial

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

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

Diversification Opportunities for Infrastructure Dividend and IGM Financial

0.27

Correlation Coefficient

Infrastructure Dividend  IGM Financial

Modest diversification

The 3 months correlation between Infrastructure and IGM is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Infrastructure Dividend Split and IGM Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Financial and Infrastructure Dividend 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 Infrastructure Dividend Split are associated (or correlated) with IGM Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IGM Financial has no effect on the direction of Infrastructure Dividend i.e., Infrastructure Dividend and IGM Financial go up and down completely randomly.

Pair Corralation between Infrastructure Dividend and IGM Financial

Assuming the 90 days horizon Infrastructure Dividend Split is expected to generate 0.62 times more return on investment than IGM Financial. However, Infrastructure Dividend Split is 1.62 times less risky than IGM Financial. It trades about -0.05 of its potential returns per unit of risk. IGM Financial is currently generating about -0.06 per unit of risk. If you would invest  1,493  in Infrastructure Dividend Split on September 21, 2024 and sell it today you would lose (10.00) from holding Infrastructure Dividend Split or give up 0.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.65%
Values	Daily Returns

Infrastructure Dividend Split  vs.  IGM Financial

Infrastructure Dividend

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastructure Dividend Split has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

IGM Financial

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IGM Financial are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, IGM Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infrastructure Dividend and IGM Financial

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

The idea behind Infrastructure Dividend Split and IGM Financial 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.