Correlation Between Intermediate Capital and EasyJet PLC
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and EasyJet PLC 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 EasyJet PLC 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 EasyJet PLC, you can compare the effects of market volatilities on Intermediate Capital and EasyJet PLC 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 EasyJet PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and EasyJet PLC.
Diversification Opportunities for Intermediate Capital and EasyJet PLC
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Intermediate and EasyJet is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and EasyJet PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EasyJet 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 EasyJet PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EasyJet PLC has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and EasyJet PLC go up and down completely randomly.
Pair Corralation between Intermediate Capital and EasyJet PLC
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.93 times more return on investment than EasyJet PLC. However, Intermediate Capital Group is 1.07 times less risky than EasyJet PLC. It trades about 0.07 of its potential returns per unit of risk. EasyJet PLC is currently generating about 0.01 per unit of risk. If you would invest 133,457 in Intermediate Capital Group on October 28, 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 | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. EasyJet PLC
Performance |
| Timeline |
| Intermediate Capital |
| EasyJet PLC |
Intermediate Capital and EasyJet PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and EasyJet PLC
The main advantage of trading using opposite Intermediate Capital and EasyJet PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, EasyJet PLC 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 EasyJet PLC will offset losses from the drop in EasyJet PLC's long position.| Intermediate Capital vs. National Beverage Corp | Intermediate Capital vs. Seraphim Space Investment | Intermediate Capital vs. Diversified Energy | Intermediate Capital vs. Chrysalis Investments |
| EasyJet PLC vs. Delta Air Lines | EasyJet PLC vs. Pentair PLC | EasyJet PLC vs. Fortuna Silver Mines | EasyJet PLC vs. Porvair plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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