Correlation Between Intrepid Capital and Intrepid Endurance

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

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

Diversification Opportunities for Intrepid Capital and Intrepid Endurance

0.09

Correlation Coefficient

Intrepid Capital  Intrepid Endurance

Significant diversification

The 3 months correlation between Intrepid and Intrepid is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Capital Fund and Intrepid Endurance Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Endurance and Intrepid 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 Intrepid Capital Fund are associated (or correlated) with Intrepid Endurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Endurance has no effect on the direction of Intrepid Capital i.e., Intrepid Capital and Intrepid Endurance go up and down completely randomly.

Pair Corralation between Intrepid Capital and Intrepid Endurance

Assuming the 90 days horizon Intrepid Capital Fund is expected to generate 0.55 times more return on investment than Intrepid Endurance. However, Intrepid Capital Fund is 1.82 times less risky than Intrepid Endurance. It trades about 0.15 of its potential returns per unit of risk. Intrepid Endurance Fund is currently generating about 0.04 per unit of risk. If you would invest  1,060  in Intrepid Capital Fund on September 2, 2024 and sell it today you would earn a total of  243.00  from holding Intrepid Capital Fund or generate 22.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.79%
Values	Daily Returns

Intrepid Capital Fund  vs.  Intrepid Endurance Fund

Intrepid Capital

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Capital Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Intrepid Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Intrepid Endurance

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Endurance Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intrepid Endurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrepid Capital and Intrepid Endurance

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

The idea behind Intrepid Capital Fund and Intrepid Endurance Fund 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.