Correlation Between INTER CARS and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both INTER CARS and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on INTER CARS and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and CDN IMPERIAL.
Diversification Opportunities for INTER CARS and CDN IMPERIAL
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INTER and CDN is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL BANK 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of INTER CARS i.e., INTER CARS and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between INTER CARS and CDN IMPERIAL
Assuming the 90 days horizon INTER CARS SA is expected to generate 2.13 times more return on investment than CDN IMPERIAL. However, INTER CARS is 2.13 times more volatile than CDN IMPERIAL BANK. It trades about 0.25 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about 0.33 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. CDN IMPERIAL BANK
Performance |
| Timeline |
| INTER CARS SA |
| CDN IMPERIAL BANK |
INTER CARS and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and CDN IMPERIAL
The main advantage of trading using opposite INTER CARS and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL'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 |
| CDN IMPERIAL vs. Perseus Mining Limited | CDN IMPERIAL vs. ECHO INVESTMENT ZY | CDN IMPERIAL vs. LION ONE METALS | CDN IMPERIAL vs. GREENX METALS LTD |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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