Correlation Between INTER CARS and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both INTER CARS and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on INTER CARS and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and THRACE PLASTICS.
Diversification Opportunities for INTER CARS and THRACE PLASTICS
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between INTER and THRACE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of INTER CARS i.e., INTER CARS and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between INTER CARS and THRACE PLASTICS
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.68 times more return on investment than THRACE PLASTICS. However, INTER CARS is 1.68 times more volatile than THRACE PLASTICS. It trades about 0.15 of its potential returns per unit of risk. THRACE PLASTICS is currently generating about -0.08 per unit of risk. If you would invest 11,040 in INTER CARS SA on September 13, 2024 and sell it today you would earn a total of 640.00 from holding INTER CARS SA or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. THRACE PLASTICS
Performance |
| Timeline |
| INTER CARS SA |
| THRACE PLASTICS |
INTER CARS and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and THRACE PLASTICS
The main advantage of trading using opposite INTER CARS and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| INTER CARS vs. Bridgestone | INTER CARS vs. Superior Plus Corp | INTER CARS vs. SIVERS SEMICONDUCTORS AB | INTER CARS vs. Norsk Hydro ASA |
| THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple Inc | THRACE PLASTICS vs. Apple 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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