Correlation Between Wizz Air and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Intermediate Capital Group, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Intermediate Capital.
Diversification Opportunities for Wizz Air and Intermediate Capital
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Wizz and Intermediate is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Intermediate Capital go up and down completely randomly.
Pair Corralation between Wizz Air and Intermediate Capital
Assuming the 90 days trading horizon Wizz Air Holdings is expected to under-perform the Intermediate Capital. In addition to that, Wizz Air is 1.8 times more volatile than Intermediate Capital Group. It trades about -0.04 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.07 per unit of volatility. If you would invest 137,114 in Intermediate Capital Group on September 1, 2024 and sell it today you would earn a total of 74,686 from holding Intermediate Capital Group or generate 54.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Intermediate Capital Group
Performance |
| Timeline |
| Wizz Air Holdings |
| Intermediate Capital |
Wizz Air and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Intermediate Capital
The main advantage of trading using opposite Wizz Air and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. AfriTin Mining | Wizz Air vs. Metals Exploration Plc | Wizz Air vs. MTI Wireless Edge | Wizz Air vs. mobilezone holding AG |
| Intermediate Capital vs. Virgin Wines UK | Intermediate Capital vs. Aeorema Communications Plc | Intermediate Capital vs. Spirent Communications plc | Intermediate Capital vs. BE Semiconductor Industries |
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 Stocks Directory module to find actively traded stocks across global markets.
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