Correlation Between NXP Semiconductors and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both NXP Semiconductors 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 NXP Semiconductors and Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXP Semiconductors NV and Intermediate Capital Group, you can compare the effects of market volatilities on NXP Semiconductors 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 NXP Semiconductors with a short position of Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXP Semiconductors and Intermediate Capital.
Diversification Opportunities for NXP Semiconductors and Intermediate Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NXP and Intermediate is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NXP Semiconductors NV and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital and NXP Semiconductors 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 NXP Semiconductors NV 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 NXP Semiconductors i.e., NXP Semiconductors and Intermediate Capital go up and down completely randomly.
Pair Corralation between NXP Semiconductors and Intermediate Capital
Assuming the 90 days trading horizon NXP Semiconductors is expected to generate 1.68 times less return on investment than Intermediate Capital. In addition to that, NXP Semiconductors is 1.05 times more volatile than Intermediate Capital Group. It trades about 0.07 of its total potential returns per unit of risk. Intermediate Capital Group is currently generating about 0.13 per unit of volatility. If you would invest 2,041 in Intermediate Capital Group on April 25, 2025 and sell it today you would earn a total of 359.00 from holding Intermediate Capital Group or generate 17.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NXP Semiconductors NV vs. Intermediate Capital Group
Performance |
Timeline |
NXP Semiconductors |
Intermediate Capital |
NXP Semiconductors and Intermediate Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NXP Semiconductors and Intermediate Capital
The main advantage of trading using opposite NXP Semiconductors and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXP Semiconductors 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.NXP Semiconductors vs. The Japan Steel | NXP Semiconductors vs. Olympic Steel | NXP Semiconductors vs. BlueScope Steel Limited | NXP Semiconductors vs. NEW MILLENNIUM IRON |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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