Correlation Between Intrepid Capital and Geneva Smid

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

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

Diversification Opportunities for Intrepid Capital and Geneva Smid

0.81

Correlation Coefficient

Intrepid Capital  Geneva Smid

Very poor diversification

The 3 months correlation between Intrepid and Geneva is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Capital Fund and Geneva Smid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geneva Smid Cap and Intrepid 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 Intrepid Capital Fund are associated (or correlated) with Geneva Smid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geneva Smid Cap has no effect on the direction of Intrepid Capital i.e., Intrepid Capital and Geneva Smid go up and down completely randomly.

Pair Corralation between Intrepid Capital and Geneva Smid

Assuming the 90 days horizon Intrepid Capital Fund is expected to generate 0.57 times more return on investment than Geneva Smid. However, Intrepid Capital Fund is 1.75 times less risky than Geneva Smid. It trades about 0.0 of its potential returns per unit of risk. Geneva Smid Cap is currently generating about -0.07 per unit of risk. If you would invest  1,278  in Intrepid Capital Fund on December 27, 2024 and sell it today you would lose (3.00) from holding Intrepid Capital Fund or give up 0.23% of portfolio value over 90 days.

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

Intrepid Capital Fund  vs.  Geneva Smid Cap

Intrepid Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intrepid Capital Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Intrepid Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Geneva Smid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Geneva Smid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Geneva Smid 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 Capital and Geneva Smid

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

The idea behind Intrepid Capital Fund and Geneva Smid Cap 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.