Correlation Between Intermediate Capital and Qurate Retail

Can any of the company-specific risk be diversified away by investing in both Intermediate Capital and Qurate Retail 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 Qurate Retail 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 Qurate Retail Series, you can compare the effects of market volatilities on Intermediate Capital and Qurate Retail 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 Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate Capital and Qurate Retail.

Diversification Opportunities for Intermediate Capital and Qurate Retail

-0.05

Correlation Coefficient

Intermediate Capital  Qurate Retail

Good diversification

The 3 months correlation between Intermediate and Qurate is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Qurate Retail go up and down completely randomly.

Pair Corralation between Intermediate Capital and Qurate Retail

Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.51 times more return on investment than Qurate Retail. However, Intermediate Capital Group is 1.95 times less risky than Qurate Retail. It trades about 0.26 of its potential returns per unit of risk. Qurate Retail Series is currently generating about 0.11 per unit of risk. If you would invest  206,400  in Intermediate Capital Group on October 26, 2024 and sell it today you would earn a total of  25,000  from holding Intermediate Capital Group or generate 12.11% return on investment over 90 days.

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

Intermediate Capital Group  vs.  Qurate Retail Series

Intermediate Capital

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Intermediate Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Qurate Retail Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Intermediate Capital and Qurate Retail

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

The idea behind Intermediate Capital Group and Qurate Retail Series 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.