Correlation Between Intact Financial and Denison Mines

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

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

Diversification Opportunities for Intact Financial and Denison Mines

-0.42

Correlation Coefficient

Intact Financial  Denison Mines

Very good diversification

The 3 months correlation between Intact and Denison is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Denison Mines Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Denison Mines Corp 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 Denison Mines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Denison Mines Corp has no effect on the direction of Intact Financial i.e., Intact Financial and Denison Mines go up and down completely randomly.

Pair Corralation between Intact Financial and Denison Mines

Assuming the 90 days trading horizon Intact Financial is expected to under-perform the Denison Mines. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 3.29 times less risky than Denison Mines. The stock trades about -0.08 of its potential returns per unit of risk. The Denison Mines Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  202.00  in Denison Mines Corp on May 16, 2025 and sell it today you would earn a total of  80.00  from holding Denison Mines Corp or generate 39.6% return on investment over 90 days.

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

Intact Financial  vs.  Denison Mines Corp

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.

Denison Mines Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Denison Mines Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Denison Mines displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Denison Mines

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

The idea behind Intact Financial and Denison Mines 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.