Correlation Between Intermediate Capital and Hilton Food
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Hilton Food 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 Hilton Food 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 Hilton Food Group, you can compare the effects of market volatilities on Intermediate Capital and Hilton Food 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 Hilton Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Hilton Food.
Diversification Opportunities for Intermediate Capital and Hilton Food
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Intermediate and Hilton is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Hilton Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Food Group 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 Hilton Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Food Group has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Hilton Food go up and down completely randomly.
Pair Corralation between Intermediate Capital and Hilton Food
Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 1.73 times more return on investment than Hilton Food. However, Intermediate Capital is 1.73 times more volatile than Hilton Food Group. It trades about 0.06 of its potential returns per unit of risk. Hilton Food Group is currently generating about 0.03 per unit of risk. If you would invest 206,200 in Intermediate Capital Group on September 1, 2024 and sell it today you would earn a total of 5,600 from holding Intermediate Capital Group or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intermediate Capital Group vs. Hilton Food Group
Performance |
| Timeline |
| Intermediate Capital |
| Hilton Food Group |
Intermediate Capital and Hilton Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Hilton Food
The main advantage of trading using opposite Intermediate Capital and Hilton Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Hilton Food 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 Hilton Food will offset losses from the drop in Hilton Food's long position.| Intermediate Capital vs. Virgin Wines UK | Intermediate Capital vs. Aeorema Communications Plc | Intermediate Capital vs. Spirent Communications plc | Intermediate Capital vs. BE Semiconductor Industries |
| Hilton Food vs. Intermediate Capital Group | Hilton Food vs. Grand Vision Media | Hilton Food vs. BE Semiconductor Industries | Hilton Food vs. JD Sports Fashion |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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