Correlation Between E L and IGM Financial
Can any of the company-specific risk be diversified away by investing in both E L 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 E L and IGM Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E L Financial Corp and IGM Financial, you can compare the effects of market volatilities on E L 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 E L with a short position of IGM Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of E L and IGM Financial.
Diversification Opportunities for E L and IGM Financial
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ELF and IGM is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding E L Financial Corp and IGM Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IGM Financial and E L 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 E L Financial Corp 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 E L i.e., E L and IGM Financial go up and down completely randomly.
Pair Corralation between E L and IGM Financial
Assuming the 90 days trading horizon E L is expected to generate 1.82 times less return on investment than IGM Financial. In addition to that, E L is 1.19 times more volatile than IGM Financial. It trades about 0.1 of its total potential returns per unit of risk. IGM Financial is currently generating about 0.23 per unit of volatility. If you would invest 4,870 in IGM Financial on August 29, 2025 and sell it today you would earn a total of 876.00 from holding IGM Financial or generate 17.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E L Financial Corp vs. IGM Financial
Performance |
| Timeline |
| E L Financial |
| IGM Financial |
E L and IGM Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E L and IGM Financial
The main advantage of trading using opposite E L and IGM Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E L 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.| E L vs. Magna Mining | E L vs. McEwen Mining | E L vs. Computer Modelling Group | E L vs. Rogers Communications |
| IGM Financial vs. E L Financial Corp | IGM Financial vs. Westshore Terminals Investment | IGM Financial vs. Canaf Investments | IGM Financial vs. Dominion Lending Centres |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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