Correlation Between Inter Cars and Echo Investment
Can any of the company-specific risk be diversified away by investing in both Inter Cars and Echo Investment 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 Echo Investment 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 Echo Investment SA, you can compare the effects of market volatilities on Inter Cars and Echo Investment 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 Echo Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Cars and Echo Investment.
Diversification Opportunities for Inter Cars and Echo Investment
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inter and Echo is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and Echo Investment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Echo Investment SA 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 Echo Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Echo Investment SA has no effect on the direction of Inter Cars i.e., Inter Cars and Echo Investment go up and down completely randomly.
Pair Corralation between Inter Cars and Echo Investment
Assuming the 90 days trading horizon Inter Cars SA is expected to under-perform the Echo Investment. But the stock apears to be less risky and, when comparing its historical volatility, Inter Cars SA is 1.11 times less risky than Echo Investment. The stock trades about -0.04 of its potential returns per unit of risk. The Echo Investment SA is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 465.00 in Echo Investment SA on August 31, 2024 and sell it today you would lose (29.00) from holding Echo Investment SA or give up 6.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inter Cars SA vs. Echo Investment SA
Performance |
| Timeline |
| Inter Cars SA |
| Echo Investment SA |
Inter Cars and Echo Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Cars and Echo Investment
The main advantage of trading using opposite Inter Cars and Echo Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Cars position performs unexpectedly, Echo Investment 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 Echo Investment will offset losses from the drop in Echo Investment's long position.| Inter Cars vs. Poznanska Korporacja Budowlana | Inter Cars vs. Esotiq Henderson SA | Inter Cars vs. Toya SA | Inter Cars vs. Betacom SA |
| Echo Investment vs. Asseco Business Solutions | Echo Investment vs. Detalion Games SA | Echo Investment vs. Asseco South Eastern | Echo Investment vs. CFI Holding SA |
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.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |