Correlation Between Intertek Group and Brambles
Can any of the company-specific risk be diversified away by investing in both Intertek Group and Brambles 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 Intertek Group and Brambles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intertek Group Plc and Brambles Ltd ADR, you can compare the effects of market volatilities on Intertek Group and Brambles 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 Intertek Group with a short position of Brambles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intertek Group and Brambles.
Diversification Opportunities for Intertek Group and Brambles
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Intertek and Brambles is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Intertek Group Plc and Brambles Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brambles ADR and Intertek Group 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 Intertek Group Plc are associated (or correlated) with Brambles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brambles ADR has no effect on the direction of Intertek Group i.e., Intertek Group and Brambles go up and down completely randomly.
Pair Corralation between Intertek Group and Brambles
Assuming the 90 days horizon Intertek Group Plc is expected to generate 1.07 times more return on investment than Brambles. However, Intertek Group is 1.07 times more volatile than Brambles Ltd ADR. It trades about 0.42 of its potential returns per unit of risk. Brambles Ltd ADR is currently generating about 0.05 per unit of risk. If you would invest 5,841 in Intertek Group Plc on November 3, 2024 and sell it today you would earn a total of 692.00 from holding Intertek Group Plc or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intertek Group Plc vs. Brambles Ltd ADR
Performance |
| Timeline |
| Intertek Group Plc |
| Brambles ADR |
Intertek Group and Brambles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intertek Group and Brambles
The main advantage of trading using opposite Intertek Group and Brambles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intertek Group position performs unexpectedly, Brambles 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 Brambles will offset losses from the drop in Brambles' long position.| Intertek Group vs. Dexterra Group | Intertek Group vs. Wildpack Beverage | Intertek Group vs. DATA Communications Management | Intertek Group vs. Mitie Group Plc |
| Brambles vs. Cintas | Brambles vs. Thomson Reuters Corp | Brambles vs. Global Payments | Brambles vs. Wolters Kluwer NV |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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