Correlation Between Group Ten and Intrepid Metals

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

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

Diversification Opportunities for Group Ten and Intrepid Metals

-0.35

Correlation Coefficient

Group Ten  Intrepid Metals

Very good diversification

The 3 months correlation between Group and Intrepid is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Group Ten Metals and Intrepid Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intrepid Metals Corp and Group Ten 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 Group Ten Metals are associated (or correlated) with Intrepid Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intrepid Metals Corp has no effect on the direction of Group Ten i.e., Group Ten and Intrepid Metals go up and down completely randomly.

Pair Corralation between Group Ten and Intrepid Metals

Assuming the 90 days horizon Group Ten Metals is expected to under-perform the Intrepid Metals. In addition to that, Group Ten is 1.2 times more volatile than Intrepid Metals Corp. It trades about -0.06 of its total potential returns per unit of risk. Intrepid Metals Corp is currently generating about 0.07 per unit of volatility. If you would invest  26.00  in Intrepid Metals Corp on December 1, 2024 and sell it today you would earn a total of  4.00  from holding Intrepid Metals Corp or generate 15.38% return on investment over 90 days.

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

Group Ten Metals  vs.  Intrepid Metals Corp

Group Ten Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Group Ten Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Intrepid Metals Corp

Risk-Adjusted Performance

Modest

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

Pair Trading with Group Ten and Intrepid Metals

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

The idea behind Group Ten Metals and Intrepid Metals Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.