Correlation Between Thomson Reuters and Intact Financial

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

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

Diversification Opportunities for Thomson Reuters and Intact Financial

0.55

Correlation Coefficient

Thomson Reuters  Intact Financial

Very weak diversification

The 3 months correlation between Thomson and Intact is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Thomson Reuters Corp and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and Thomson Reuters 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 Thomson Reuters Corp 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 Thomson Reuters i.e., Thomson Reuters and Intact Financial go up and down completely randomly.

Pair Corralation between Thomson Reuters and Intact Financial

Assuming the 90 days trading horizon Thomson Reuters Corp is expected to generate 1.28 times more return on investment than Intact Financial. However, Thomson Reuters is 1.28 times more volatile than Intact Financial. It trades about 0.13 of its potential returns per unit of risk. Intact Financial is currently generating about 0.04 per unit of risk. If you would invest  25,105  in Thomson Reuters Corp on April 22, 2025 and sell it today you would earn a total of  2,726  from holding Thomson Reuters Corp or generate 10.86% return on investment over 90 days.

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

Thomson Reuters Corp  vs.  Intact Financial

Thomson Reuters Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thomson Reuters Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Thomson Reuters may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Intact Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intact Financial are ranked lower than 3 (%) 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 Thomson Reuters and Intact Financial

The main advantage of trading using opposite Thomson Reuters and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thomson Reuters 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 Thomson Reuters Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.