Correlation Between Intrepid Capital and Intrepid Income

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Intrepid Capital and Intrepid Income 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 Intrepid Capital and Intrepid Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intrepid Capital Fund and Intrepid Income Fund, you can compare the effects of market volatilities on Intrepid Capital and Intrepid Income 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 Intrepid Capital with a short position of Intrepid Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Capital and Intrepid Income.

Diversification Opportunities for Intrepid Capital and Intrepid Income

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Intrepid and Intrepid is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Capital Fund and Intrepid Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Income and Intrepid 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 Intrepid Capital Fund are associated (or correlated) with Intrepid Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Income has no effect on the direction of Intrepid Capital i.e., Intrepid Capital and Intrepid Income go up and down completely randomly.

Pair Corralation between Intrepid Capital and Intrepid Income

Assuming the 90 days horizon Intrepid Capital Fund is expected to generate 3.5 times more return on investment than Intrepid Income. However, Intrepid Capital is 3.5 times more volatile than Intrepid Income Fund. It trades about 0.28 of its potential returns per unit of risk. Intrepid Income Fund is currently generating about 0.16 per unit of risk. If you would invest  1,269  in Intrepid Capital Fund on September 12, 2024 and sell it today you would earn a total of  34.00  from holding Intrepid Capital Fund or generate 2.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Intrepid Capital Fund  vs.  Intrepid Income Fund

 Performance 
       Timeline  
Intrepid Capital 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Capital Fund are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Intrepid Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Intrepid Income 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Income Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intrepid Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Intrepid Capital and Intrepid Income Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Intrepid Capital and Intrepid Income

The main advantage of trading using opposite Intrepid Capital and Intrepid Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intrepid Capital position performs unexpectedly, Intrepid Income 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 Intrepid Income will offset losses from the drop in Intrepid Income's long position.
The idea behind Intrepid Capital Fund and Intrepid Income Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Commodity Directory module to find actively traded commodities issued by global exchanges.

Other Complementary Tools

Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Fundamental Analysis
View fundamental data based on most recent published financial statements
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios