Correlation Between Intact Financial and Timbercreek Financial

Can any of the company-specific risk be diversified away by investing in both Intact Financial and Timbercreek 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 Intact Financial and Timbercreek Financial 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 Timbercreek Financial Corp, you can compare the effects of market volatilities on Intact Financial and Timbercreek 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 Intact Financial with a short position of Timbercreek Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intact Financial and Timbercreek Financial.

Diversification Opportunities for Intact Financial and Timbercreek Financial

0.92

Correlation Coefficient

Intact Financial  Timbercreek Financial

Almost no diversification

The 3 months correlation between Intact and Timbercreek is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Intact Financial Corp and Timbercreek Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Timbercreek Financial 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 Timbercreek Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Timbercreek Financial has no effect on the direction of Intact Financial i.e., Intact Financial and Timbercreek Financial go up and down completely randomly.

Pair Corralation between Intact Financial and Timbercreek Financial

Assuming the 90 days trading horizon Intact Financial is expected to generate 1.22 times less return on investment than Timbercreek Financial. But when comparing it to its historical volatility, Intact Financial Corp is 1.43 times less risky than Timbercreek Financial. It trades about 0.35 of its potential returns per unit of risk. Timbercreek Financial Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  681.00  in Timbercreek Financial Corp on April 24, 2025 and sell it today you would earn a total of  101.00  from holding Timbercreek Financial Corp or generate 14.83% return on investment over 90 days.

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

Intact Financial Corp  vs.  Timbercreek Financial Corp

Intact Financial Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial Corp are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Intact Financial may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Timbercreek Financial

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Timbercreek Financial Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Timbercreek Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intact Financial and Timbercreek Financial

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

The idea behind Intact Financial Corp and Timbercreek Financial Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.