Correlation Between Intal High and World Core

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

By analyzing existing cross correlation between Intal High Relative and World Core Equity, you can compare the effects of market volatilities on Intal High and World Core 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 Intal High with a short position of World Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intal High and World Core.

Diversification Opportunities for Intal High and World Core

0.2

Correlation Coefficient

Intal High  World Core

Modest diversification

The 3 months correlation between Intal and World is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and World Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Core Equity and Intal High 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 Intal High Relative are associated (or correlated) with World Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Core Equity has no effect on the direction of Intal High i.e., Intal High and World Core go up and down completely randomly.

Pair Corralation between Intal High and World Core

Assuming the 90 days horizon Intal High Relative is expected to generate 0.89 times more return on investment than World Core. However, Intal High Relative is 1.12 times less risky than World Core. It trades about 0.15 of its potential returns per unit of risk. World Core Equity is currently generating about -0.02 per unit of risk. If you would invest  1,249  in Intal High Relative on December 29, 2024 and sell it today you would earn a total of  87.00  from holding Intal High Relative or generate 6.97% return on investment over 90 days.

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

Intal High Relative  vs.  World Core Equity

Intal High Relative

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intal High Relative are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Intal High may actually be approaching a critical reversion point that can send shares even higher in April 2025.

World Core Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days World Core Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, World Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intal High and World Core

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

The idea behind Intal High Relative and World Core Equity 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.