Correlation Between Intermediate Capital and Abingdon Health
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Abingdon Health 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 Intermediate Capital and Abingdon Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Capital Group and Abingdon Health Plc, you can compare the effects of market volatilities on Intermediate Capital and Abingdon Health 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 Intermediate Capital with a short position of Abingdon Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Abingdon Health.
Diversification Opportunities for Intermediate Capital and Abingdon Health
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intermediate and Abingdon is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Abingdon Health Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abingdon Health Plc and Intermediate Capital 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 Intermediate Capital Group are associated (or correlated) with Abingdon Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abingdon Health Plc has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Abingdon Health go up and down completely randomly.
Pair Corralation between Intermediate Capital and Abingdon Health
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.67 times more return on investment than Abingdon Health. However, Intermediate Capital Group is 1.5 times less risky than Abingdon Health. It trades about 0.26 of its potential returns per unit of risk. Abingdon Health Plc is currently generating about 0.02 per unit of risk. If you would invest 206,400 in Intermediate Capital Group on October 26, 2024 and sell it today you would earn a total of 25,000 from holding Intermediate Capital Group or generate 12.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. Abingdon Health Plc
Performance |
| Timeline |
| Intermediate Capital |
| Abingdon Health Plc |
Intermediate Capital and Abingdon Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Abingdon Health
The main advantage of trading using opposite Intermediate Capital and Abingdon Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Abingdon Health 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 Abingdon Health will offset losses from the drop in Abingdon Health's long position.| Intermediate Capital vs. SupplyMe Capital PLC | Intermediate Capital vs. Premier African Minerals | Intermediate Capital vs. SANTANDER UK 8 | Intermediate Capital vs. Tower Resources plc |
| Abingdon Health vs. Axfood AB | Abingdon Health vs. Mobile Tornado Group | Abingdon Health vs. United Utilities Group | Abingdon Health vs. Grieg Seafood |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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