Correlation Between Vecima Networks and Intact Financial

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

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

Diversification Opportunities for Vecima Networks and Intact Financial

-0.45

Correlation Coefficient

Vecima Networks  Intact Financial

Very good diversification

The 3 months correlation between Vecima and Intact is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Vecima Networks and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Vecima Networks 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 Vecima Networks are associated (or correlated) with Intact Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intact Financial has no effect on the direction of Vecima Networks i.e., Vecima Networks and Intact Financial go up and down completely randomly.

Pair Corralation between Vecima Networks and Intact Financial

Assuming the 90 days trading horizon Vecima Networks is expected to generate 1.94 times more return on investment than Intact Financial. However, Vecima Networks is 1.94 times more volatile than Intact Financial. It trades about 0.04 of its potential returns per unit of risk. Intact Financial is currently generating about -0.04 per unit of risk. If you would invest  1,000.00  in Vecima Networks on May 11, 2025 and sell it today you would earn a total of  37.00  from holding Vecima Networks or generate 3.7% return on investment over 90 days.

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

Vecima Networks  vs.  Intact Financial

Vecima Networks

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vecima Networks are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Vecima Networks is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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.

Pair Trading with Vecima Networks and Intact Financial

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

The idea behind Vecima Networks and Intact Financial 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.