Correlation Between Intermediate Capital and ENERGY ONE

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

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

Diversification Opportunities for Intermediate Capital and ENERGY ONE

0.68

Correlation Coefficient

Intermediate Capital  ENERGY ONE

Poor diversification

The 3 months correlation between Intermediate and ENERGY is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Capital Group and ENERGY ONE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGY ONE and Intermediate 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 Intermediate Capital Group are associated (or correlated) with ENERGY ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGY ONE has no effect on the direction of Intermediate Capital i.e., Intermediate Capital and ENERGY ONE go up and down completely randomly.

Pair Corralation between Intermediate Capital and ENERGY ONE

Assuming the 90 days trading horizon Intermediate Capital Group is expected to generate 0.85 times more return on investment than ENERGY ONE. However, Intermediate Capital Group is 1.18 times less risky than ENERGY ONE. It trades about 0.18 of its potential returns per unit of risk. ENERGY ONE is currently generating about 0.08 per unit of risk. If you would invest  1,914  in Intermediate Capital Group on April 20, 2025 and sell it today you would earn a total of  506.00  from holding Intermediate Capital Group or generate 26.44% return on investment over 90 days.

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

Intermediate Capital Group  vs.  ENERGY ONE

Intermediate Capital

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Capital Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Intermediate Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

ENERGY ONE

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ENERGY ONE are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ENERGY ONE exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Intermediate Capital and ENERGY ONE

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

The idea behind Intermediate Capital Group and ENERGY ONE 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 Global Correlations module to find global opportunities by holding instruments from different markets.