Correlation Between Tufton Oceanic and Intermediate Capital

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

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

Diversification Opportunities for Tufton Oceanic and Intermediate Capital

0.63

Correlation Coefficient

Tufton Oceanic  Intermediate Capital

Poor diversification

The 3 months correlation between Tufton and Intermediate is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Tufton Oceanic Assets and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and Tufton Oceanic 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 Tufton Oceanic Assets are associated (or correlated) with Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of Tufton Oceanic i.e., Tufton Oceanic and Intermediate Capital go up and down completely randomly.

Pair Corralation between Tufton Oceanic and Intermediate Capital

Assuming the 90 days trading horizon Tufton Oceanic is expected to generate 1.55 times less return on investment than Intermediate Capital. But when comparing it to its historical volatility, Tufton Oceanic Assets is 1.71 times less risky than Intermediate Capital. It trades about 0.2 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  175,488  in Intermediate Capital Group on April 23, 2025 and sell it today you would earn a total of  35,712  from holding Intermediate Capital Group or generate 20.35% return on investment over 90 days.

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

Tufton Oceanic Assets  vs.  Intermediate Capital Group

Tufton Oceanic Assets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tufton Oceanic Assets are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Tufton Oceanic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Intermediate Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tufton Oceanic and Intermediate Capital

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

The idea behind Tufton Oceanic Assets and Intermediate Capital Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.