Correlation Between INTER CARS and Mercedes-Benz Group
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Mercedes-Benz Group 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 Mercedes-Benz Group 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 Mercedes Benz Group AG, you can compare the effects of market volatilities on INTER CARS and Mercedes-Benz Group 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 Mercedes-Benz Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Mercedes-Benz Group.
Diversification Opportunities for INTER CARS and Mercedes-Benz Group
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTER and Mercedes-Benz is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Mercedes Benz Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mercedes Benz Group 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 Mercedes-Benz Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mercedes Benz Group has no effect on the direction of INTER CARS i.e., INTER CARS and Mercedes-Benz Group go up and down completely randomly.
Pair Corralation between INTER CARS and Mercedes-Benz Group
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.73 times more return on investment than Mercedes-Benz Group. However, INTER CARS is 1.73 times more volatile than Mercedes Benz Group AG. It trades about 0.03 of its potential returns per unit of risk. Mercedes Benz Group AG is currently generating about 0.0 per unit of risk. If you would invest 9,495 in INTER CARS SA on September 3, 2024 and sell it today you would earn a total of 1,705 from holding INTER CARS SA or generate 17.96% 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. Mercedes Benz Group AG
Performance |
| Timeline |
| INTER CARS SA |
| Mercedes Benz Group |
INTER CARS and Mercedes-Benz Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Mercedes-Benz Group
The main advantage of trading using opposite INTER CARS and Mercedes-Benz Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Mercedes-Benz Group 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 Mercedes-Benz Group will offset losses from the drop in Mercedes-Benz Group's long position.| INTER CARS vs. MOVIE GAMES SA | INTER CARS vs. FRACTAL GAMING GROUP | INTER CARS vs. Constellation Software | INTER CARS vs. Alfa Financial Software |
| Mercedes-Benz Group vs. Salesforce | Mercedes-Benz Group vs. Auto Trader Group | Mercedes-Benz Group vs. OAKTRSPECLENDNEW | Mercedes-Benz Group vs. National Retail Properties |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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