Correlation Between INTER CARS and Corporate Office
Can any of the company-specific risk be diversified away by investing in both INTER CARS and Corporate Office 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 Corporate Office 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 Corporate Office Properties, you can compare the effects of market volatilities on INTER CARS and Corporate Office 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 Corporate Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Corporate Office.
Diversification Opportunities for INTER CARS and Corporate Office
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTER and Corporate is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Corporate Office Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Office Pro 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 Corporate Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Office Pro has no effect on the direction of INTER CARS i.e., INTER CARS and Corporate Office go up and down completely randomly.
Pair Corralation between INTER CARS and Corporate Office
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.2 times more return on investment than Corporate Office. However, INTER CARS is 1.2 times more volatile than Corporate Office Properties. It trades about 0.33 of its potential returns per unit of risk. Corporate Office Properties is currently generating about -0.08 per unit of risk. If you would invest 11,780 in INTER CARS SA on October 25, 2024 and sell it today you would earn a total of 1,320 from holding INTER CARS SA or generate 11.21% 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. Corporate Office Properties
Performance |
| Timeline |
| INTER CARS SA |
| Corporate Office Pro |
INTER CARS and Corporate Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and Corporate Office
The main advantage of trading using opposite INTER CARS and Corporate Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Corporate Office 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 Corporate Office will offset losses from the drop in Corporate Office's long position.| INTER CARS vs. DXC Technology Co | INTER CARS vs. UPDATE SOFTWARE | INTER CARS vs. Micron Technology | INTER CARS vs. Mitsui Chemicals |
| Corporate Office vs. Thai Beverage Public | Corporate Office vs. Perseus Mining Limited | Corporate Office vs. NAKED WINES PLC | Corporate Office vs. Forsys Metals Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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