Correlation Between Intact Financial and Pet Valu

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

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

Diversification Opportunities for Intact Financial and Pet Valu

0.31

Correlation Coefficient

Intact Financial  Pet Valu

Weak diversification

The 3 months correlation between Intact and Pet is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Pet Valu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Valu 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 Pet Valu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Valu Holdings has no effect on the direction of Intact Financial i.e., Intact Financial and Pet Valu go up and down completely randomly.

Pair Corralation between Intact Financial and Pet Valu

Assuming the 90 days trading horizon Intact Financial is expected to generate 0.63 times more return on investment than Pet Valu. However, Intact Financial is 1.58 times less risky than Pet Valu. It trades about 0.09 of its potential returns per unit of risk. Pet Valu Holdings is currently generating about -0.01 per unit of risk. If you would invest  19,147  in Intact Financial on January 31, 2025 and sell it today you would earn a total of  11,470  from holding Intact Financial or generate 59.9% return on investment over 90 days.

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

Intact Financial  vs.  Pet Valu Holdings

Intact Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Intact Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pet Valu Holdings

Risk-Adjusted Performance

Modest

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

Pair Trading with Intact Financial and Pet Valu

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

The idea behind Intact Financial and Pet Valu 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..