Correlation Between Intermediate Capital and Bioventix

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

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

Diversification Opportunities for Intermediate Capital and Bioventix

-0.11

Correlation Coefficient

Intermediate Capital  Bioventix

Good diversification

The 3 months correlation between Intermediate and Bioventix is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Bioventix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bioventix and Intermediate Capital 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 Intermediate Capital Group are associated (or correlated) with Bioventix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bioventix has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Bioventix go up and down completely randomly.

Pair Corralation between Intermediate Capital and Bioventix

Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.77 times more return on investment than Bioventix. However, Intermediate Capital Group is 1.3 times less risky than Bioventix. It trades about 0.04 of its potential returns per unit of risk. Bioventix is currently generating about -0.04 per unit of risk. If you would invest  206,800  in Intermediate Capital Group on September 5, 2024 and sell it today you would earn a total of  9,200  from holding Intermediate Capital Group or generate 4.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Intermediate Capital Group  vs.  Bioventix

Intermediate Capital

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 3 (%) 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.

Bioventix

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bioventix has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Bioventix is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Intermediate Capital and Bioventix

The main advantage of trading using opposite Intermediate Capital and Bioventix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate Capital position performs unexpectedly, Bioventix 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 Bioventix will offset losses from the drop in Bioventix's long position.

The idea behind Intermediate Capital Group and Bioventix 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .