Correlation Between AcadeMedia and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both AcadeMedia and Intermediate Capital 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 AcadeMedia and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AcadeMedia AB and Intermediate Capital Group, you can compare the effects of market volatilities on AcadeMedia and Intermediate Capital 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 AcadeMedia with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of AcadeMedia and Intermediate Capital.
Diversification Opportunities for AcadeMedia and Intermediate Capital
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AcadeMedia and Intermediate is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding AcadeMedia AB and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and AcadeMedia 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 AcadeMedia AB are associated (or correlated) with Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of AcadeMedia i.e., AcadeMedia and Intermediate Capital go up and down completely randomly.
Pair Corralation between AcadeMedia and Intermediate Capital
Assuming the 90 days trading horizon AcadeMedia is expected to generate 1.64 times less return on investment than Intermediate Capital. But when comparing it to its historical volatility, AcadeMedia AB is 1.28 times less risky than Intermediate Capital. It trades about 0.06 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 112,264 in Intermediate Capital Group on August 25, 2024 and sell it today you would earn a total of 97,136 from holding Intermediate Capital Group or generate 86.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
AcadeMedia AB vs. Intermediate Capital Group
Performance |
| Timeline |
| AcadeMedia AB |
| Intermediate Capital |
AcadeMedia and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AcadeMedia and Intermediate Capital
The main advantage of trading using opposite AcadeMedia and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AcadeMedia position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.| AcadeMedia vs. Samsung Electronics Co | AcadeMedia vs. Samsung Electronics Co | AcadeMedia vs. Hyundai Motor | AcadeMedia vs. Toyota Motor Corp |
| Intermediate Capital vs. Catalyst Media Group | Intermediate Capital vs. Oncimmune Holdings plc | Intermediate Capital vs. Invesco Health Care | Intermediate Capital vs. Coor Service Management |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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