Correlation Between Tamburi Investment and Intermediate Capital

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

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

Diversification Opportunities for Tamburi Investment and Intermediate Capital

0.41

Correlation Coefficient

Tamburi Investment  Intermediate Capital

Very weak diversification

The 3 months correlation between Tamburi and Intermediate is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tamburi Investment Partners and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Tamburi Investment 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 Tamburi Investment Partners 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 Tamburi Investment i.e., Tamburi Investment and Intermediate Capital go up and down completely randomly.

Pair Corralation between Tamburi Investment and Intermediate Capital

Assuming the 90 days trading horizon Tamburi Investment is expected to generate 10.61 times less return on investment than Intermediate Capital. But when comparing it to its historical volatility, Tamburi Investment Partners is 1.68 times less risky than Intermediate Capital. It trades about 0.01 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  145,567  in Intermediate Capital Group on September 14, 2024 and sell it today you would earn a total of  69,833  from holding Intermediate Capital Group or generate 47.97% return on investment over 90 days.

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

Tamburi Investment Partners  vs.  Intermediate Capital Group

Tamburi Investment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Intermediate Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intermediate Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Intermediate Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Tamburi Investment and Intermediate Capital

The main advantage of trading using opposite Tamburi Investment and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamburi Investment 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 Tamburi Investment Partners 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.