Correlation Between Intrepid Income and Intrepid Capital
Can any of the company-specific risk be diversified away by investing in both Intrepid Income and Intrepid Capital 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 Income and Intrepid Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intrepid Income Fund and Intrepid Capital Fund, you can compare the effects of market volatilities on Intrepid Income and Intrepid Capital 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 Income with a short position of Intrepid Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Income and Intrepid Capital.
Diversification Opportunities for Intrepid Income and Intrepid Capital
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTREPID and INTREPID is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Income Fund and Intrepid Capital Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Capital and Intrepid Income 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 Income Fund are associated (or correlated) with Intrepid Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Capital has no effect on the direction of Intrepid Income i.e., Intrepid Income and Intrepid Capital go up and down completely randomly.
Pair Corralation between Intrepid Income and Intrepid Capital
Assuming the 90 days horizon Intrepid Income is expected to generate 2.28 times less return on investment than Intrepid Capital. But when comparing it to its historical volatility, Intrepid Income Fund is 5.53 times less risky than Intrepid Capital. It trades about 0.35 of its potential returns per unit of risk. Intrepid Capital Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,169 in Intrepid Capital Fund on September 1, 2024 and sell it today you would earn a total of 141.00 from holding Intrepid Capital Fund or generate 12.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intrepid Income Fund vs. Intrepid Capital Fund
Performance |
| Timeline |
| Intrepid Income |
| Intrepid Capital |
Intrepid Income and Intrepid Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intrepid Income and Intrepid Capital
The main advantage of trading using opposite Intrepid Income and Intrepid Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intrepid Income position performs unexpectedly, Intrepid Capital 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 Capital will offset losses from the drop in Intrepid Capital's long position.| Intrepid Income vs. Intrepid Capital Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Capital Fund |
| Intrepid Capital vs. Artisan High Income | Intrepid Capital vs. Blackrock High Yield | Intrepid Capital vs. Pioneer High Yield | Intrepid Capital vs. Federated Institutional High |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |