Correlation Between Infrastrutture Wireless and Intermediate Capital

Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless 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 Infrastrutture Wireless and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infrastrutture Wireless Italiane and Intermediate Capital Group, you can compare the effects of market volatilities on Infrastrutture Wireless 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 Infrastrutture Wireless with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and Intermediate Capital.

Diversification Opportunities for Infrastrutture Wireless and Intermediate Capital

0.4

Correlation Coefficient

Infrastrutture Wireless  Intermediate Capital

Very weak diversification

The 3 months correlation between Infrastrutture and Intermediate is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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 Infrastrutture Wireless i.e., Infrastrutture Wireless and Intermediate Capital go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and Intermediate Capital

Assuming the 90 days trading horizon Infrastrutture Wireless Italiane is expected to under-perform the Intermediate Capital. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 1.66 times less risky than Intermediate Capital. The stock trades about -0.13 of its potential returns per unit of risk. The Intermediate Capital Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  207,600  in Intermediate Capital Group on September 3, 2024 and sell it today you would earn a total of  4,200  from holding Intermediate Capital Group or generate 2.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Infrastrutture Wireless Italia  vs.  Intermediate Capital Group

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Intermediate Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Intermediate Capital is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Infrastrutture Wireless and Intermediate Capital

The main advantage of trading using opposite Infrastrutture Wireless and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Infrastrutture Wireless 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 Infrastrutture Wireless Italiane 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.