Correlation Between Intermediate Capital and Batm Advanced

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

Diversification Opportunities for Intermediate Capital and Batm Advanced

-0.12

Correlation Coefficient

Intermediate Capital  Batm Advanced

Good diversification

The 3 months correlation between Intermediate and Batm is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Batm Advanced go up and down completely randomly.

Pair Corralation between Intermediate Capital and Batm Advanced

Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.76 times more return on investment than Batm Advanced. However, Intermediate Capital Group is 1.32 times less risky than Batm Advanced. It trades about 0.16 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about -0.06 per unit of risk. If you would invest  205,400  in Intermediate Capital Group on November 19, 2024 and sell it today you would earn a total of  37,200  from holding Intermediate Capital Group or generate 18.11% 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.  Batm Advanced Communications

Intermediate Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Intermediate Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Batm Advanced Commun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Batm Advanced Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Intermediate Capital and Batm Advanced

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

The idea behind Intermediate Capital Group and Batm Advanced Communications 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 CEOs Directory module to screen CEOs from public companies around the world.