Correlation Between Intech Us and Large Cap

Can any of the company-specific risk be diversified away by investing in both Intech Us and Large Cap 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 Intech Us and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Intech Managed Volatility and Large Cap E, you can compare the effects of market volatilities on Intech Us and Large Cap 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 Intech Us with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intech Us and Large Cap.

Diversification Opportunities for Intech Us and Large Cap

0.96

Correlation Coefficient

Intech Us  Large Cap

Almost no diversification

The 3 months correlation between Intech and Large is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Intech Managed Volatility and Large Cap E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap E and Intech Us 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 Intech Managed Volatility are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap E has no effect on the direction of Intech Us i.e., Intech Us and Large Cap go up and down completely randomly.

Pair Corralation between Intech Us and Large Cap

Assuming the 90 days horizon Intech Managed Volatility is expected to generate 0.9 times more return on investment than Large Cap. However, Intech Managed Volatility is 1.11 times less risky than Large Cap. It trades about 0.15 of its potential returns per unit of risk. Large Cap E is currently generating about 0.11 per unit of risk. If you would invest  946.00  in Intech Managed Volatility on September 4, 2024 and sell it today you would earn a total of  280.00  from holding Intech Managed Volatility or generate 29.6% return on investment over 90 days.

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

Intech Managed Volatility  vs.  Large Cap E

Intech Managed Volatility

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intech Managed Volatility are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Intech Us may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Large Cap E

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap E are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Large Cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Intech Us and Large Cap

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

The idea behind Intech Managed Volatility and Large Cap E 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.