Correlation Between Intermediate Capital and Atresmedia

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

Diversification Opportunities for Intermediate Capital and Atresmedia

0.38

Correlation Coefficient

Intermediate Capital  Atresmedia

Weak diversification

The 3 months correlation between Intermediate and Atresmedia is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia 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 Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Atresmedia go up and down completely randomly.

Pair Corralation between Intermediate Capital and Atresmedia

Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 1.89 times more return on investment than Atresmedia. However, Intermediate Capital is 1.89 times more volatile than Atresmedia. It trades about 0.03 of its potential returns per unit of risk. Atresmedia is currently generating about 0.0 per unit of risk. If you would invest  207,600  in Intermediate Capital Group on September 3, 2024 and sell it today you would earn a total of  4,200  from holding Intermediate Capital Group or generate 2.02% return on investment over 90 days.

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

Intermediate Capital Group  vs.  Atresmedia

Intermediate Capital

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 2 (%) 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.

Atresmedia

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Intermediate Capital and Atresmedia

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

The idea behind Intermediate Capital Group and Atresmedia 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.