Correlation Between INTER CARS and NEXON Co
Can any of the company-specific risk be diversified away by investing in both INTER CARS and NEXON Co 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 NEXON Co 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 NEXON Co, you can compare the effects of market volatilities on INTER CARS and NEXON Co 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 NEXON Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and NEXON Co.
Diversification Opportunities for INTER CARS and NEXON Co
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTER and NEXON is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON Co 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 NEXON Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON Co has no effect on the direction of INTER CARS i.e., INTER CARS and NEXON Co go up and down completely randomly.
Pair Corralation between INTER CARS and NEXON Co
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.5 times more return on investment than NEXON Co. However, INTER CARS SA is 2.02 times less risky than NEXON Co. It trades about 0.25 of its potential returns per unit of risk. NEXON Co is currently generating about -0.23 per unit of risk. If you would invest 10,460 in INTER CARS SA on September 1, 2024 and sell it today you would earn a total of 1,060 from holding INTER CARS SA or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
INTER CARS SA vs. NEXON Co
Performance |
| Timeline |
| INTER CARS SA |
| NEXON Co |
INTER CARS and NEXON Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and NEXON Co
The main advantage of trading using opposite INTER CARS and NEXON Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, NEXON Co 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 NEXON Co will offset losses from the drop in NEXON Co'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 |
| NEXON Co vs. Tencent Music Entertainment | NEXON Co vs. INTER CARS SA | NEXON Co vs. GEAR4MUSIC LS 10 | NEXON Co vs. SIEM OFFSHORE NEW |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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