Correlation Between INTER CARS and SHELF DRILLING
Can any of the company-specific risk be diversified away by investing in both INTER CARS and SHELF DRILLING 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 SHELF DRILLING 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 SHELF DRILLING LTD, you can compare the effects of market volatilities on INTER CARS and SHELF DRILLING 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 SHELF DRILLING. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and SHELF DRILLING.
Diversification Opportunities for INTER CARS and SHELF DRILLING
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTER and SHELF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and SHELF DRILLING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHELF DRILLING LTD 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 SHELF DRILLING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHELF DRILLING LTD has no effect on the direction of INTER CARS i.e., INTER CARS and SHELF DRILLING go up and down completely randomly.
Pair Corralation between INTER CARS and SHELF DRILLING
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.52 times more return on investment than SHELF DRILLING. However, INTER CARS SA is 1.91 times less risky than SHELF DRILLING. It trades about 0.02 of its potential returns per unit of risk. SHELF DRILLING LTD is currently generating about -0.01 per unit of risk. If you would invest 9,762 in INTER CARS SA on August 25, 2024 and sell it today you would earn a total of 938.00 from holding INTER CARS SA or generate 9.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. SHELF DRILLING LTD
Performance |
| Timeline |
| INTER CARS SA |
| SHELF DRILLING LTD |
INTER CARS and SHELF DRILLING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and SHELF DRILLING
The main advantage of trading using opposite INTER CARS and SHELF DRILLING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, SHELF DRILLING 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 SHELF DRILLING will offset losses from the drop in SHELF DRILLING's long position.| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. Origin Agritech |
| SHELF DRILLING vs. Qurate Retail Series | SHELF DRILLING vs. MARKET VECTR RETAIL | SHELF DRILLING vs. Fast Retailing Co | SHELF DRILLING vs. INTER CARS SA |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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