Correlation Between INTER CARS and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both INTER CARS and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on INTER CARS and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and CarsalesCom.
Diversification Opportunities for INTER CARS and CarsalesCom
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and CarsalesCom is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of INTER CARS i.e., INTER CARS and CarsalesCom go up and down completely randomly.
Pair Corralation between INTER CARS and CarsalesCom
Assuming the 90 days horizon INTER CARS is expected to generate 1.88 times less return on investment than CarsalesCom. In addition to that, INTER CARS is 1.5 times more volatile than CarsalesCom. It trades about 0.17 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.48 per unit of volatility. If you would invest 2,240 in CarsalesCom on September 1, 2024 and sell it today you would earn a total of 320.00 from holding CarsalesCom or generate 14.29% 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. CarsalesCom
Performance |
| Timeline |
| INTER CARS SA |
| CarsalesCom |
INTER CARS and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and CarsalesCom
The main advantage of trading using opposite INTER CARS and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's 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 |
| CarsalesCom vs. Alphabet Class A | CarsalesCom vs. Alphabet Class A | CarsalesCom vs. Meta Platforms | CarsalesCom vs. Tencent Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |