Correlation Between Intermediate Capital and Britvic PLC

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

Diversification Opportunities for Intermediate Capital and Britvic PLC

-0.65

Correlation Coefficient

Intermediate Capital  Britvic PLC

Excellent diversification

The 3 months correlation between Intermediate and Britvic is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and Britvic PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Britvic PLC ADR 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 Britvic PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Britvic PLC ADR has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and Britvic PLC go up and down completely randomly.

Pair Corralation between Intermediate Capital and Britvic PLC

If you would invest  3,250  in Britvic PLC ADR on October 6, 2024 and sell it today you would earn a total of  54.00  from holding Britvic PLC ADR or generate 1.66% return on investment over 90 days.

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

Intermediate Capital Group  vs.  Britvic PLC ADR

Intermediate Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Intermediate Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Britvic PLC ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Britvic PLC ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Britvic PLC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intermediate Capital and Britvic PLC

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

The idea behind Intermediate Capital Group and Britvic PLC ADR 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.