Correlation Between IGM Financial and Star Diamond

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

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

Diversification Opportunities for IGM Financial and Star Diamond

-0.81

Correlation Coefficient

IGM Financial  Star Diamond

Pay attention - limited upside

The 3 months correlation between IGM and Star is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding IGM Financial and Star Diamond Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Diamond Corp 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 Star Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Diamond Corp has no effect on the direction of IGM Financial i.e., IGM Financial and Star Diamond go up and down completely randomly.

Pair Corralation between IGM Financial and Star Diamond

Assuming the 90 days trading horizon IGM Financial is expected to generate 0.12 times more return on investment than Star Diamond. However, IGM Financial is 8.25 times less risky than Star Diamond. It trades about 0.26 of its potential returns per unit of risk. Star Diamond Corp is currently generating about -0.03 per unit of risk. If you would invest  4,596  in IGM Financial on August 4, 2025 and sell it today you would earn a total of  799.00  from holding IGM Financial or generate 17.38% return on investment over 90 days.

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

IGM Financial  vs.  Star Diamond Corp

IGM Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in IGM Financial are ranked lower than 21 (%) 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.

Star Diamond Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Star Diamond Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with IGM Financial and Star Diamond

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

The idea behind IGM Financial and Star Diamond 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.