Correlation Between INTER CARS and Martifer SGPS
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Martifer SGPS 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 Martifer SGPS 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 Martifer SGPS SA, you can compare the effects of market volatilities on INTER CARS and Martifer SGPS 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 Martifer SGPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Martifer SGPS.
Diversification Opportunities for INTER CARS and Martifer SGPS
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between INTER and Martifer is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Martifer SGPS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martifer SGPS SA 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 Martifer SGPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martifer SGPS SA has no effect on the direction of INTER CARS i.e., INTER CARS and Martifer SGPS go up and down completely randomly.
Pair Corralation between INTER CARS and Martifer SGPS
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.5 times more return on investment than Martifer SGPS. However, INTER CARS is 1.5 times more volatile than Martifer SGPS SA. It trades about 0.09 of its potential returns per unit of risk. Martifer SGPS SA is currently generating about 0.01 per unit of risk. If you would invest 11,260 in INTER CARS SA on October 9, 2024 and sell it today you would earn a total of 600.00 from holding INTER CARS SA or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
INTER CARS SA vs. Martifer SGPS SA
Performance |
| Timeline |
| INTER CARS SA |
| Martifer SGPS SA |
INTER CARS and Martifer SGPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Martifer SGPS
The main advantage of trading using opposite INTER CARS and Martifer SGPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Martifer SGPS 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 Martifer SGPS will offset losses from the drop in Martifer SGPS's long position.| INTER CARS vs. PT Astra International | INTER CARS vs. Superior Plus Corp | INTER CARS vs. NMI Holdings | INTER CARS vs. SIVERS SEMICONDUCTORS AB |
| Martifer SGPS vs. Kingdee International Software | Martifer SGPS vs. Agilent Technologies | Martifer SGPS vs. Uber Technologies | Martifer SGPS vs. Easy Software AG |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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