Correlation Between Alphabet CDR and Intact Financial

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

By analyzing existing cross correlation between Alphabet CDR (CAD Hedged) and Intact Financial, you can compare the effects of market volatilities on Alphabet CDR and Intact 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 Alphabet CDR with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet CDR and Intact Financial.

Diversification Opportunities for Alphabet CDR and Intact Financial

-0.71

Correlation Coefficient

Alphabet CDR  Intact Financial

Pay attention - limited upside

The 3 months correlation between Alphabet and Intact is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet CDR (CAD Hedged) and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Alphabet CDR 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 Alphabet CDR (CAD Hedged) are associated (or correlated) with Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial has no effect on the direction of Alphabet CDR i.e., Alphabet CDR and Intact Financial go up and down completely randomly.

Pair Corralation between Alphabet CDR and Intact Financial

Assuming the 90 days trading horizon Alphabet CDR (CAD Hedged) is expected to generate 1.34 times more return on investment than Intact Financial. However, Alphabet CDR is 1.34 times more volatile than Intact Financial. It trades about 0.3 of its potential returns per unit of risk. Intact Financial is currently generating about -0.18 per unit of risk. If you would invest  2,951  in Alphabet CDR (CAD Hedged) on July 3, 2025 and sell it today you would earn a total of  1,048  from holding Alphabet CDR (CAD Hedged) or generate 35.51% return on investment over 90 days.

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

Alphabet CDR (CAD Hedged)  vs.  Intact Financial

Alphabet CDR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet CDR (CAD Hedged) are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alphabet CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Intact Financial

Risk-Adjusted Performance

Weakest

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

Pair Trading with Alphabet CDR and Intact Financial

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

The idea behind Alphabet CDR (CAD Hedged) and Intact 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.