Correlation Between Intermediate Capital and Genuit Group
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Genuit Group 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 Genuit Group 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 Genuit Group plc, you can compare the effects of market volatilities on Intermediate Capital and Genuit Group 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 Genuit Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Genuit Group.
Diversification Opportunities for Intermediate Capital and Genuit Group
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intermediate and Genuit is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Genuit Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genuit Group 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 Genuit Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genuit Group plc has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Genuit Group go up and down completely randomly.
Pair Corralation between Intermediate Capital and Genuit Group
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.96 times more return on investment than Genuit Group. However, Intermediate Capital Group is 1.05 times less risky than Genuit Group. It trades about 0.07 of its potential returns per unit of risk. Genuit Group plc is currently generating about 0.05 per unit of risk. If you would invest 114,648 in Intermediate Capital Group on September 3, 2024 and sell it today you would earn a total of 97,152 from holding Intermediate Capital Group or generate 84.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Intermediate Capital Group vs. Genuit Group plc
Performance |
| Timeline |
| Intermediate Capital |
| Genuit Group plc |
Intermediate Capital and Genuit Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Genuit Group
The main advantage of trading using opposite Intermediate Capital and Genuit Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Genuit Group 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 Genuit Group will offset losses from the drop in Genuit Group's long position.| Intermediate Capital vs. SupplyMe Capital PLC | Intermediate Capital vs. 88 Energy | Intermediate Capital vs. Vodafone Group PLC | Intermediate Capital vs. Vodafone Group PLC |
| Genuit Group vs. Catalyst Media Group | Genuit Group vs. CATLIN GROUP | Genuit Group vs. Magnora ASA | Genuit Group vs. RTW Venture Fund |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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