Correlation Between Intrepid Income and Frost Total

Can any of the company-specific risk be diversified away by investing in both Intrepid Income and Frost Total 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 Intrepid Income and Frost Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intrepid Income Fund and Frost Total Return, you can compare the effects of market volatilities on Intrepid Income and Frost Total 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 Intrepid Income with a short position of Frost Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Income and Frost Total.

Diversification Opportunities for Intrepid Income and Frost Total

0.9

Correlation Coefficient

Intrepid Income  Frost Total

Almost no diversification

The 3 months correlation between INTREPID and Frost is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Income Fund and Frost Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Total Return and Intrepid Income 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 Intrepid Income Fund are associated (or correlated) with Frost Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Total Return has no effect on the direction of Intrepid Income i.e., Intrepid Income and Frost Total go up and down completely randomly.

Pair Corralation between Intrepid Income and Frost Total

Assuming the 90 days horizon Intrepid Income is expected to generate 1.26 times less return on investment than Frost Total. But when comparing it to its historical volatility, Intrepid Income Fund is 1.92 times less risky than Frost Total. It trades about 0.17 of its potential returns per unit of risk. Frost Total Return is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  962.00  in Frost Total Return on December 28, 2024 and sell it today you would earn a total of  16.00  from holding Frost Total Return or generate 1.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.36%
Values	Daily Returns

Intrepid Income Fund  vs.  Frost Total Return

Intrepid Income

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Income Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intrepid Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Frost Total Return

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Frost Total Return are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Frost Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrepid Income and Frost Total

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

The idea behind Intrepid Income Fund and Frost Total Return 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.