Correlation Between Intact Financial and SPoT Coffee

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

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

Diversification Opportunities for Intact Financial and SPoT Coffee

0.0

Correlation Coefficient

Intact Financial  SPoT Coffee

Pay attention - limited upside

The 3 months correlation between Intact and SPoT is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and SPoT Coffee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPoT Coffee 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 Corp are associated (or correlated) with SPoT Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPoT Coffee has no effect on the direction of Intact Financial i.e., Intact Financial and SPoT Coffee go up and down completely randomly.

Pair Corralation between Intact Financial and SPoT Coffee

If you would invest  2,348  in Intact Financial Corp on September 5, 2024 and sell it today you would earn a total of  82.00  from holding Intact Financial Corp or generate 3.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Intact Financial Corp  vs.  SPoT Coffee

Intact Financial Corp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental indicators, Intact Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

SPoT Coffee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPoT Coffee has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, SPoT Coffee is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Intact Financial and SPoT Coffee

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

The idea behind Intact Financial Corp and SPoT Coffee 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.