Correlation Between Adriatic Metals and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Adriatic Metals 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 Adriatic Metals and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adriatic Metals and Intermediate Capital Group, you can compare the effects of market volatilities on Adriatic Metals 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 Adriatic Metals with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Intermediate Capital.
Diversification Opportunities for Adriatic Metals and Intermediate Capital
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Adriatic and Intermediate is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Adriatic Metals 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 Adriatic Metals 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 Adriatic Metals i.e., Adriatic Metals and Intermediate Capital go up and down completely randomly.
Pair Corralation between Adriatic Metals and Intermediate Capital
Assuming the 90 days trading horizon Adriatic Metals is expected to generate 1.28 times less return on investment than Intermediate Capital. In addition to that, Adriatic Metals is 1.21 times more volatile than Intermediate Capital Group. It trades about 0.22 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.33 per unit of volatility. If you would invest 205,000 in Intermediate Capital Group on November 9, 2024 and sell it today you would earn a total of 33,000 from holding Intermediate Capital Group or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adriatic Metals vs. Intermediate Capital Group
Performance |
| Timeline |
| Adriatic Metals |
| Intermediate Capital |
Adriatic Metals and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adriatic Metals and Intermediate Capital
The main advantage of trading using opposite Adriatic Metals and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals 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.| Adriatic Metals vs. First Class Metals | Adriatic Metals vs. Fulcrum Metals PLC | Adriatic Metals vs. URU Metals | Adriatic Metals vs. Cornish Metals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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