Correlation Between Neometals and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Neometals and Intermediate 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 Neometals and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neometals and Intermediate Capital Group, you can compare the effects of market volatilities on Neometals and Intermediate 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 Neometals with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neometals and Intermediate Capital.
Diversification Opportunities for Neometals and Intermediate Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Neometals and Intermediate is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Neometals and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Neometals 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 Neometals are associated (or correlated) with Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Neometals i.e., Neometals and Intermediate Capital go up and down completely randomly.
Pair Corralation between Neometals and Intermediate Capital
Assuming the 90 days trading horizon Neometals is expected to under-perform the Intermediate Capital. In addition to that, Neometals is 2.02 times more volatile than Intermediate Capital Group. It trades about -0.1 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.08 per unit of volatility. If you would invest 109,357 in Intermediate Capital Group on August 30, 2024 and sell it today you would earn a total of 100,043 from holding Intermediate Capital Group or generate 91.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Neometals vs. Intermediate Capital Group
Performance |
| Timeline |
| Neometals |
| Intermediate Capital |
Neometals and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neometals and Intermediate Capital
The main advantage of trading using opposite Neometals and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neometals position performs unexpectedly, Intermediate 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's long position.The idea behind Neometals and Intermediate Capital Group 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.| Intermediate Capital vs. Toyota Motor Corp | Intermediate Capital vs. Lendinvest PLC | Intermediate Capital vs. Neometals | Intermediate Capital vs. Coor Service Management |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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