Correlation Between Intermediate Capital and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Intermediate Capital and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Bankers Investment.
Diversification Opportunities for Intermediate Capital and Bankers Investment
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Intermediate and Bankers is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Bankers Investment go up and down completely randomly.
Pair Corralation between Intermediate Capital and Bankers Investment
Assuming the 90 days trading horizon Intermediate Capital Group is expected to under-perform the Bankers Investment. In addition to that, Intermediate Capital is 2.67 times more volatile than Bankers Investment Trust. It trades about -0.06 of its total potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.18 per unit of volatility. If you would invest 10,928 in Bankers Investment Trust on October 18, 2024 and sell it today you would earn a total of 1,152 from holding Bankers Investment Trust or generate 10.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. Bankers Investment Trust
Performance |
| Timeline |
| Intermediate Capital |
| Bankers Investment Trust |
Intermediate Capital and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Bankers Investment
The main advantage of trading using opposite Intermediate Capital and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Intermediate Capital vs. SupplyMe Capital PLC | Intermediate Capital vs. SM Energy Co | Intermediate Capital vs. FuelCell Energy | Intermediate Capital vs. Grand Vision Media |
| Bankers Investment vs. Centaur Media | Bankers Investment vs. Fidelity National Information | Bankers Investment vs. Intermediate Capital Group | Bankers Investment vs. Ion Beam Applications |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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