Correlation Between Europa Metals and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Europa 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 Europa 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 Europa Metals and Intermediate Capital Group, you can compare the effects of market volatilities on Europa 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 Europa Metals with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europa Metals and Intermediate Capital.
Diversification Opportunities for Europa Metals and Intermediate Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Europa and Intermediate is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Europa 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 Europa 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 Europa 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 Europa Metals i.e., Europa Metals and Intermediate Capital go up and down completely randomly.
Pair Corralation between Europa Metals and Intermediate Capital
Assuming the 90 days trading horizon Europa Metals is expected to under-perform the Intermediate Capital. In addition to that, Europa Metals is 1.56 times more volatile than Intermediate Capital Group. It trades about -0.01 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.07 per unit of volatility. If you would invest 133,457 in Intermediate Capital Group on October 26, 2024 and sell it today you would earn a total of 97,943 from holding Intermediate Capital Group or generate 73.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Europa Metals vs. Intermediate Capital Group
Performance |
| Timeline |
| Europa Metals |
| Intermediate Capital |
Europa Metals and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europa Metals and Intermediate Capital
The main advantage of trading using opposite Europa Metals and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europa 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.| Europa Metals vs. American Homes 4 | Europa Metals vs. Ally Financial | Europa Metals vs. UNIQA Insurance Group | Europa Metals vs. Bankers Investment Trust |
| Intermediate Capital vs. EJF Investments | Intermediate Capital vs. New Residential Investment | Intermediate Capital vs. Schroders Investment Trusts | Intermediate Capital vs. Gaztransport et Technigaz |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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