Correlation Between Centaur Media and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Intermediate Capital Group, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Intermediate Capital.
Diversification Opportunities for Centaur Media and Intermediate Capital
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centaur and Intermediate is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Intermediate Capital go up and down completely randomly.
Pair Corralation between Centaur Media and Intermediate Capital
Assuming the 90 days trading horizon Centaur Media is expected to under-perform the Intermediate Capital. But the stock apears to be less risky and, when comparing its historical volatility, Centaur Media is 1.51 times less risky than Intermediate Capital. The stock trades about -0.12 of its potential returns per unit of risk. The Intermediate Capital Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 206,200 in Intermediate Capital Group on September 1, 2024 and sell it today you would earn a total of 5,600 from holding Intermediate Capital Group or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. Intermediate Capital Group
Performance |
| Timeline |
| Centaur Media |
| Intermediate Capital |
Centaur Media and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Intermediate Capital
The main advantage of trading using opposite Centaur Media and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. X FAB Silicon Foundries | Centaur Media vs. Coor Service Management | Centaur Media vs. Hochschild Mining plc | Centaur Media vs. Universal Music Group |
| Intermediate Capital vs. Virgin Wines UK | Intermediate Capital vs. Aeorema Communications Plc | Intermediate Capital vs. Spirent Communications plc | Intermediate Capital vs. BE Semiconductor Industries |
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.
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