Correlation Between Intermediate Capital and Legal General
Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Legal General 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 Legal General 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 Legal General Group, you can compare the effects of market volatilities on Intermediate Capital and Legal General 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 Legal General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Legal General.
Diversification Opportunities for Intermediate Capital and Legal General
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Intermediate and Legal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Legal General Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legal General 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 Legal General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legal General Group has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Legal General go up and down completely randomly.
Pair Corralation between Intermediate Capital and Legal General
Assuming the 90 days trading horizon Intermediate Capital Group is expected to under-perform the Legal General. In addition to that, Intermediate Capital is 2.38 times more volatile than Legal General Group. It trades about -0.01 of its total potential returns per unit of risk. Legal General Group is currently generating about 0.03 per unit of volatility. If you would invest 22,210 in Legal General Group on August 28, 2024 and sell it today you would earn a total of 100.00 from holding Legal General Group or generate 0.45% 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. Legal General Group
Performance |
| Timeline |
| Intermediate Capital |
| Legal General Group |
Intermediate Capital and Legal General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate Capital and Legal General
The main advantage of trading using opposite Intermediate Capital and Legal General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Legal General 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 Legal General will offset losses from the drop in Legal General's long position.| Intermediate Capital vs. Sovereign Metals | Intermediate Capital vs. Fulcrum Metals PLC | Intermediate Capital vs. Panther Metals PLC | Intermediate Capital vs. AMG Advanced Metallurgical |
| Legal General vs. Planet Fitness Cl | Legal General vs. Orient Telecoms | Legal General vs. Universal Display Corp | Legal General vs. Zegona Communications 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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |