Correlation Between INTER CARS and Food Life
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Food Life 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 Food Life 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 Food Life Companies, you can compare the effects of market volatilities on INTER CARS and Food Life 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 Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Food Life.
Diversification Opportunities for INTER CARS and Food Life
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and Food is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies 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 Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of INTER CARS i.e., INTER CARS and Food Life go up and down completely randomly.
Pair Corralation between INTER CARS and Food Life
Assuming the 90 days horizon INTER CARS is expected to generate 1.72 times less return on investment than Food Life. But when comparing it to its historical volatility, INTER CARS SA is 1.16 times less risky than Food Life. It trades about 0.25 of its potential returns per unit of risk. Food Life Companies is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 1,810 in Food Life Companies on September 1, 2024 and sell it today you would earn a total of 330.00 from holding Food Life Companies or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Food Life Companies
Performance |
| Timeline |
| INTER CARS SA |
| Food Life Companies |
INTER CARS and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Food Life
The main advantage of trading using opposite INTER CARS and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| INTER CARS vs. Commercial Vehicle Group | INTER CARS vs. Zijin Mining Group | INTER CARS vs. GEELY AUTOMOBILE | INTER CARS vs. Grupo Carso SAB |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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