Correlation Between Brookfield Business and Intact Financ

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

By analyzing existing cross correlation between Brookfield Business Corp and Intact Financ 1, you can compare the effects of market volatilities on Brookfield Business and Intact Financ 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 Brookfield Business with a short position of Intact Financ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brookfield Business and Intact Financ.

Diversification Opportunities for Brookfield Business and Intact Financ

-0.28

Correlation Coefficient

Brookfield Business  Intact Financ

Very good diversification

The 3 months correlation between Brookfield and Intact is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Brookfield Business Corp and Intact Financ 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financ 1 and Brookfield Business 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 Brookfield Business Corp are associated (or correlated) with Intact Financ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financ 1 has no effect on the direction of Brookfield Business i.e., Brookfield Business and Intact Financ go up and down completely randomly.

Pair Corralation between Brookfield Business and Intact Financ

Assuming the 90 days trading horizon Brookfield Business Corp is expected to under-perform the Intact Financ. In addition to that, Brookfield Business is 7.32 times more volatile than Intact Financ 1. It trades about -0.01 of its total potential returns per unit of risk. Intact Financ 1 is currently generating about -0.05 per unit of volatility. If you would invest  2,201  in Intact Financ 1 on July 25, 2025 and sell it today you would lose (11.00) from holding Intact Financ 1 or give up 0.5% of portfolio value over 90 days.

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

Brookfield Business Corp  vs.  Intact Financ 1

Brookfield Business Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Brookfield Business Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brookfield Business displayed solid returns over the last few months and may actually be approaching a breakup point.

Intact Financ 1

Risk-Adjusted Performance

Weakest

Over the last 90 days Intact Financ 1 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Intact Financ is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Brookfield Business and Intact Financ

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

The idea behind Brookfield Business Corp and Intact Financ 1 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.