Correlation Between Apple CDR and Intact Financial

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

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

Diversification Opportunities for Apple CDR and Intact Financial

-0.32

Correlation Coefficient

Apple CDR  Intact Financial

Very good diversification

The 3 months correlation between Apple and Intact is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apple CDR and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Apple CDR 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 Apple CDR 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 Apple CDR i.e., Apple CDR and Intact Financial go up and down completely randomly.

Pair Corralation between Apple CDR and Intact Financial

Assuming the 90 days trading horizon Apple CDR is expected to generate 1.41 times more return on investment than Intact Financial. However, Apple CDR is 1.41 times more volatile than Intact Financial. It trades about 0.03 of its potential returns per unit of risk. Intact Financial is currently generating about 0.03 per unit of risk. If you would invest  3,026  in Apple CDR on April 24, 2025 and sell it today you would earn a total of  68.00  from holding Apple CDR or generate 2.25% return on investment over 90 days.

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

Apple CDR  vs.  Intact Financial

Apple CDR

Risk-Adjusted Performance

Weak

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

Intact Financial

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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 Apple CDR and Intact Financial

The main advantage of trading using opposite Apple CDR and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple CDR 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 Apple CDR 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.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.