Correlation Between Intrepid Metals and Group Ten

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

By analyzing existing cross correlation between Intrepid Metals Corp and Group Ten Metals, you can compare the effects of market volatilities on Intrepid Metals and Group Ten 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 Metals with a short position of Group Ten. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Metals and Group Ten.

Diversification Opportunities for Intrepid Metals and Group Ten

0.39

Correlation Coefficient

Intrepid Metals  Group Ten

Weak diversification

The 3 months correlation between Intrepid and Group is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Metals Corp and Group Ten Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Ten Metals and Intrepid Metals 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 Metals Corp are associated (or correlated) with Group Ten. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Ten Metals has no effect on the direction of Intrepid Metals i.e., Intrepid Metals and Group Ten go up and down completely randomly.

Pair Corralation between Intrepid Metals and Group Ten

Assuming the 90 days horizon Intrepid Metals Corp is expected to under-perform the Group Ten. But the otc stock apears to be less risky and, when comparing its historical volatility, Intrepid Metals Corp is 1.35 times less risky than Group Ten. The otc stock trades about -0.01 of its potential returns per unit of risk. The Group Ten Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  8.49  in Group Ten Metals on September 3, 2024 and sell it today you would earn a total of  1.51  from holding Group Ten Metals or generate 17.79% return on investment over 90 days.

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

Intrepid Metals Corp  vs.  Group Ten Metals

Intrepid Metals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intrepid Metals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Intrepid Metals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Group Ten Metals

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Group Ten Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Group Ten reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intrepid Metals and Group Ten

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

The idea behind Intrepid Metals Corp and Group Ten Metals 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.