Correlation Between INTER CARS and National Beverage
Can any of the company-specific risk be diversified away by investing in both INTER CARS and National Beverage 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 INTER CARS and National Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and National Beverage Corp, you can compare the effects of market volatilities on INTER CARS and National Beverage 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 INTER CARS with a short position of National Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and National Beverage.
Diversification Opportunities for INTER CARS and National Beverage
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and National is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and INTER CARS 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 INTER CARS SA are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of INTER CARS i.e., INTER CARS and National Beverage go up and down completely randomly.
Pair Corralation between INTER CARS and National Beverage
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.93 times more return on investment than National Beverage. However, INTER CARS SA is 1.07 times less risky than National Beverage. It trades about 0.15 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.04 per unit of risk. If you would invest 11,040 in INTER CARS SA on September 13, 2024 and sell it today you would earn a total of 640.00 from holding INTER CARS SA or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. National Beverage Corp
Performance |
| Timeline |
| INTER CARS SA |
| National Beverage Corp |
INTER CARS and National Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and National Beverage
The main advantage of trading using opposite INTER CARS and National Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, National Beverage 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 National Beverage will offset losses from the drop in National Beverage's long position.| INTER CARS vs. Bridgestone | INTER CARS vs. Superior Plus Corp | INTER CARS vs. SIVERS SEMICONDUCTORS AB | INTER CARS vs. Norsk Hydro ASA |
| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |