Correlation Between Incar Financial and Automobile
Can any of the company-specific risk be diversified away by investing in both Incar Financial and Automobile 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 Incar Financial and Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Incar Financial Service and Automobile Pc, you can compare the effects of market volatilities on Incar Financial and Automobile 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 Incar Financial with a short position of Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Incar Financial and Automobile.
Diversification Opportunities for Incar Financial and Automobile
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Incar and Automobile is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Incar Financial Service and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc and Incar Financial 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 Incar Financial Service are associated (or correlated) with Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Incar Financial i.e., Incar Financial and Automobile go up and down completely randomly.
Pair Corralation between Incar Financial and Automobile
Assuming the 90 days trading horizon Incar Financial Service is expected to generate 0.9 times more return on investment than Automobile. However, Incar Financial Service is 1.12 times less risky than Automobile. It trades about 0.0 of its potential returns per unit of risk. Automobile Pc is currently generating about -0.09 per unit of risk. If you would invest 563,837 in Incar Financial Service on October 13, 2024 and sell it today you would lose (25,837) from holding Incar Financial Service or give up 4.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Incar Financial Service vs. Automobile Pc
Performance |
| Timeline |
| Incar Financial Service |
| Automobile Pc |
Incar Financial and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Incar Financial and Automobile
The main advantage of trading using opposite Incar Financial and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Incar Financial position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Incar Financial vs. Nice Information Telecommunication | Incar Financial vs. Hankook Steel Co | Incar Financial vs. Seoul Electronics Telecom | Incar Financial vs. Shin Steel Co |
| Automobile vs. Incar Financial Service | Automobile vs. Hana Financial | Automobile vs. Hana Materials | Automobile vs. Jeju Bank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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