Correlation Between INTER CARS and United States
Can any of the company-specific risk be diversified away by investing in both INTER CARS and United States 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 United States 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 United States Steel, you can compare the effects of market volatilities on INTER CARS and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and United States.
Diversification Opportunities for INTER CARS and United States
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INTER and United is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of INTER CARS i.e., INTER CARS and United States go up and down completely randomly.
Pair Corralation between INTER CARS and United States
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.53 times more return on investment than United States. However, INTER CARS SA is 1.89 times less risky than United States. It trades about 0.23 of its potential returns per unit of risk. United States Steel is currently generating about -0.12 per unit of risk. If you would invest 10,820 in INTER CARS SA on September 15, 2024 and sell it today you would earn a total of 940.00 from holding INTER CARS SA or generate 8.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. United States Steel
Performance |
| Timeline |
| INTER CARS SA |
| United States Steel |
INTER CARS and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and United States
The main advantage of trading using opposite INTER CARS and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| INTER CARS vs. Bridgestone | INTER CARS vs. Superior Plus Corp | INTER CARS vs. SIVERS SEMICONDUCTORS AB | INTER CARS vs. Norsk Hydro ASA |
| United States vs. Reliance Steel Aluminum | United States vs. Superior Plus Corp | United States vs. SIVERS SEMICONDUCTORS AB | United States vs. Norsk Hydro ASA |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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