Correlation Between First State and Intact Financial
Can any of the company-specific risk be diversified away by investing in both First State 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 First State and Intact Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First State Financial and Intact Financial, you can compare the effects of market volatilities on First State 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 First State with a short position of Intact Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First State and Intact Financial.
Diversification Opportunities for First State and Intact Financial
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and Intact is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding First State Financial and Intact Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intact Financial and First State 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 First State Financial 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 First State i.e., First State and Intact Financial go up and down completely randomly.
Pair Corralation between First State and Intact Financial
Given the investment horizon of 90 days First State Financial is expected to generate 74.54 times more return on investment than Intact Financial. However, First State is 74.54 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 0.11 per unit of risk. If you would invest 3.69 in First State Financial on October 15, 2025 and sell it today you would lose (1.59) from holding First State Financial or give up 43.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First State Financial vs. Intact Financial
Performance |
| Timeline |
| First State Financial |
| Intact Financial |
First State and Intact Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First State and Intact Financial
The main advantage of trading using opposite First State and Intact Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First State 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.| First State vs. First Republic Bank | First State vs. BioCube | First State vs. Trend Exploration I | First State vs. Eastern Goldfields |
| Intact Financial vs. ZhongAn Online P | Intact Financial vs. ZhongAn Online P | Intact Financial vs. Grupo de Inversiones | Intact Financial vs. Central Bancompany |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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