Correlation Between INTER CARS and General Mills
Can any of the company-specific risk be diversified away by investing in both INTER CARS and General Mills 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 General Mills 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 General Mills, you can compare the effects of market volatilities on INTER CARS and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and General Mills.
Diversification Opportunities for INTER CARS and General Mills
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INTER and General is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of INTER CARS i.e., INTER CARS and General Mills go up and down completely randomly.
Pair Corralation between INTER CARS and General Mills
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.83 times more return on investment than General Mills. However, INTER CARS SA is 1.2 times less risky than General Mills. It trades about 0.25 of its potential returns per unit of risk. General Mills is currently generating about 0.17 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 | 95.65% |
| Values | Daily Returns |
INTER CARS SA vs. General Mills
Performance |
| Timeline |
| INTER CARS SA |
| General Mills |
INTER CARS and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and General Mills
The main advantage of trading using opposite INTER CARS and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' 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 |
| General Mills vs. INTER CARS SA | General Mills vs. Geely Automobile Holdings | General Mills vs. GEELY AUTOMOBILE | General Mills vs. MCEWEN MINING INC |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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