Correlation Between Intrepid Capital and Intrepid Income
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
0.86 | 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 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 5.53 times more return on investment than Intrepid Income. However, Intrepid Capital is 5.53 times more volatile than Intrepid Income Fund. It trades about 0.15 of its potential returns per unit of risk. Intrepid Income Fund is currently generating about 0.35 per unit of risk. 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 Capital Fund vs. Intrepid Income Fund
Performance |
| Timeline |
| Intrepid Capital |
| Intrepid Income |
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.| Intrepid Capital vs. Artisan High Income | Intrepid Capital vs. Blackrock High Yield | Intrepid Capital vs. Pioneer High Yield | Intrepid Capital vs. Federated Institutional High |
| Intrepid Income vs. Intrepid Capital Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Endurance Fund | Intrepid Income vs. Intrepid Capital 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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