Correlation Between INTER CARS and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both INTER CARS and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on INTER CARS and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and SENECA FOODS-A.
Diversification Opportunities for INTER CARS and SENECA FOODS-A
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INTER and SENECA is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of INTER CARS i.e., INTER CARS and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between INTER CARS and SENECA FOODS-A
Assuming the 90 days horizon INTER CARS is expected to generate 1.21 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, INTER CARS SA is 1.35 times less risky than SENECA FOODS-A. It trades about 0.04 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,400 in SENECA FOODS A on October 13, 2024 and sell it today you would earn a total of 1,650 from holding SENECA FOODS A or generate 30.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. SENECA FOODS A
Performance |
| Timeline |
| INTER CARS SA |
| SENECA FOODS A |
INTER CARS and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and SENECA FOODS-A
The main advantage of trading using opposite INTER CARS and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| INTER CARS vs. Choice Hotels International | INTER CARS vs. PRECISION DRILLING P | INTER CARS vs. SOUTHWEST AIRLINES | INTER CARS vs. Major Drilling Group |
| SENECA FOODS-A vs. PLAYMATES TOYS | SENECA FOODS-A vs. CarsalesCom | SENECA FOODS-A vs. Hochschild Mining plc | SENECA FOODS-A vs. QINGCI GAMES 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 Positions Ratings module to 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.
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