Correlation Between Intact Financial and Cronos

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

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

Diversification Opportunities for Intact Financial and Cronos

-0.78

Correlation Coefficient

Intact Financial  Cronos

Pay attention - limited upside

The 3 months correlation between Intact and Cronos is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Cronos Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cronos Group and Intact 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 Intact Financial are associated (or correlated) with Cronos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cronos Group has no effect on the direction of Intact Financial i.e., Intact Financial and Cronos go up and down completely randomly.

Pair Corralation between Intact Financial and Cronos

Assuming the 90 days trading horizon Intact Financial is expected to under-perform the Cronos. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 2.51 times less risky than Cronos. The stock trades about -0.1 of its potential returns per unit of risk. The Cronos Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  287.00  in Cronos Group on May 21, 2025 and sell it today you would earn a total of  64.00  from holding Cronos Group or generate 22.3% return on investment over 90 days.

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

Intact Financial  vs.  Cronos Group

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 latest unfluctuating performance, the Stock's fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Cronos Group

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cronos Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cronos displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Cronos

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

The idea behind Intact Financial and Cronos Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.