Correlation Between Intact Financial and Charlottes Web

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

By analyzing existing cross correlation between Intact Financial and Charlottes Web Holdings, you can compare the effects of market volatilities on Intact Financial and Charlottes Web 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 Charlottes Web. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Charlottes Web.

Diversification Opportunities for Intact Financial and Charlottes Web

-0.32

Correlation Coefficient

Intact Financial  Charlottes Web

Very good diversification

The 3 months correlation between Intact and Charlottes is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Charlottes Web Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Charlottes Web Holdings 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 Charlottes Web. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Charlottes Web Holdings has no effect on the direction of Intact Financial i.e., Intact Financial and Charlottes Web go up and down completely randomly.

Pair Corralation between Intact Financial and Charlottes Web

Assuming the 90 days trading horizon Intact Financial is expected to under-perform the Charlottes Web. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 5.6 times less risky than Charlottes Web. The stock trades about -0.15 of its potential returns per unit of risk. The Charlottes Web Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Charlottes Web Holdings on June 1, 2025 and sell it today you would earn a total of  0.00  from holding Charlottes Web Holdings or generate 0.0% return on investment over 90 days.

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

Intact Financial  vs.  Charlottes Web Holdings

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.

Charlottes Web Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Charlottes Web Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Charlottes Web displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Charlottes Web

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

The idea behind Intact Financial and Charlottes Web Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.