Correlation Between Intal High and Large Cap

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

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

Diversification Opportunities for Intal High and Large Cap

0.96

Correlation Coefficient

Intal High  Large Cap

Almost no diversification

The 3 months correlation between Intal and Large is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and Large Cap International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap International and Intal High 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 Intal High Relative 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 International has no effect on the direction of Intal High i.e., Intal High and Large Cap go up and down completely randomly.

Pair Corralation between Intal High and Large Cap

Assuming the 90 days horizon Intal High is expected to generate 1.5 times less return on investment than Large Cap. But when comparing it to its historical volatility, Intal High Relative is 1.04 times less risky than Large Cap. It trades about 0.15 of its potential returns per unit of risk. Large Cap International is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,925  in Large Cap International on May 1, 2025 and sell it today you would earn a total of  296.00  from holding Large Cap International or generate 10.12% return on investment over 90 days.

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

Intal High Relative  vs.  Large Cap International

Intal High Relative

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Intal High Relative are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Intal High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Large Cap International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap International are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Large Cap may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Intal High and Large Cap

The main advantage of trading using opposite Intal High and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intal High 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 Intal High Relative and Large Cap International 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.