Correlation Between NYSE Composite and Intrepid Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Intrepid Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Intrepid Capital Fund, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Intrepid Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Intrepid Capital.
Diversification Opportunities for NYSE Composite and Intrepid Capital
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Intrepid is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Intrepid Capital Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Capital and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Intrepid Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Intrepid Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.91 times less return on investment than Intrepid Capital. But when comparing it to its historical volatility, NYSE Composite is 1.09 times less risky than Intrepid Capital. It trades about 0.24 of its potential returns per unit of risk. Intrepid Capital Fund is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 1,211 in Intrepid Capital Fund on August 26, 2024 and sell it today you would earn a total of 81.00 from holding Intrepid Capital Fund or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Intrepid Capital Fund
Performance |
| Timeline |
NYSE Composite and Intrepid Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Intrepid Capital Fund
Pair trading matchups for Intrepid Capital
Pair Trading with NYSE Composite and Intrepid Capital
The main advantage of trading using opposite NYSE Composite and Intrepid Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
| Intrepid Capital vs. Intrepid Endurance Fund | Intrepid Capital vs. James Balanced Golden | Intrepid Capital vs. Greenspring Fund Retail | Intrepid Capital vs. Berwyn Income 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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