Correlation Between INTER CARS and Clean Energy
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on INTER CARS and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Clean Energy.
Diversification Opportunities for INTER CARS and Clean Energy
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between INTER and Clean is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of INTER CARS i.e., INTER CARS and Clean Energy go up and down completely randomly.
Pair Corralation between INTER CARS and Clean Energy
Assuming the 90 days horizon INTER CARS SA is expected to generate 0.62 times more return on investment than Clean Energy. However, INTER CARS SA is 1.62 times less risky than Clean Energy. It trades about 0.22 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about 0.11 per unit of risk. If you would invest 11,760 in INTER CARS SA on October 13, 2024 and sell it today you would earn a total of 960.00 from holding INTER CARS SA or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. Clean Energy Fuels
Performance |
| Timeline |
| INTER CARS SA |
| Clean Energy Fuels |
INTER CARS and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Clean Energy
The main advantage of trading using opposite INTER CARS and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.| INTER CARS vs. Yuexiu Transport Infrastructure | INTER CARS vs. Tsingtao Brewery | INTER CARS vs. DAIDO METAL TD | INTER CARS vs. Osisko Metals |
| Clean Energy vs. BOS BETTER ONLINE | Clean Energy vs. ANGLO ASIAN MINING | Clean Energy vs. CSSC Offshore Marine | Clean Energy vs. CarsalesCom |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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