Correlation Between INTER CARS and ONWARD MEDICAL
Can any of the company-specific risk be diversified away by investing in both INTER CARS and ONWARD MEDICAL 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 ONWARD MEDICAL 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 ONWARD MEDICAL BV, you can compare the effects of market volatilities on INTER CARS and ONWARD MEDICAL 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 ONWARD MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and ONWARD MEDICAL.
Diversification Opportunities for INTER CARS and ONWARD MEDICAL
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between INTER and ONWARD is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and ONWARD MEDICAL BV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONWARD MEDICAL BV 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 ONWARD MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONWARD MEDICAL BV has no effect on the direction of INTER CARS i.e., INTER CARS and ONWARD MEDICAL go up and down completely randomly.
Pair Corralation between INTER CARS and ONWARD MEDICAL
Assuming the 90 days horizon INTER CARS is expected to generate 40.63 times less return on investment than ONWARD MEDICAL. But when comparing it to its historical volatility, INTER CARS SA is 3.13 times less risky than ONWARD MEDICAL. It trades about 0.0 of its potential returns per unit of risk. ONWARD MEDICAL BV is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 341.00 in ONWARD MEDICAL BV on September 15, 2024 and sell it today you would earn a total of 121.00 from holding ONWARD MEDICAL BV or generate 35.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. ONWARD MEDICAL BV
Performance |
| Timeline |
| INTER CARS SA |
| ONWARD MEDICAL BV |
INTER CARS and ONWARD MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and ONWARD MEDICAL
The main advantage of trading using opposite INTER CARS and ONWARD MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, ONWARD MEDICAL 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 ONWARD MEDICAL will offset losses from the drop in ONWARD MEDICAL'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 |
| ONWARD MEDICAL vs. Moderna | ONWARD MEDICAL vs. BioNTech SE | ONWARD MEDICAL vs. Superior Plus Corp | ONWARD MEDICAL vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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