Correlation Between Intact Financial and Theratechnologies

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

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

Diversification Opportunities for Intact Financial and Theratechnologies

-0.33

Correlation Coefficient

Intact Financial  Theratechnologies

Very good diversification

The 3 months correlation between Intact and Theratechnologies is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial and Theratechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Theratechnologies 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 Theratechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Theratechnologies has no effect on the direction of Intact Financial i.e., Intact Financial and Theratechnologies go up and down completely randomly.

Pair Corralation between Intact Financial and Theratechnologies

Assuming the 90 days trading horizon Intact Financial is expected to under-perform the Theratechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Intact Financial is 3.38 times less risky than Theratechnologies. The stock trades about -0.03 of its potential returns per unit of risk. The Theratechnologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  361.00  in Theratechnologies on May 9, 2025 and sell it today you would earn a total of  76.00  from holding Theratechnologies or generate 21.05% 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.  Theratechnologies

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 very healthy fundamental indicators, Intact Financial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Theratechnologies

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Theratechnologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Theratechnologies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Theratechnologies

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

The idea behind Intact Financial and Theratechnologies 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.