Correlation Between Inter Cars and HiProMine
Can any of the company-specific risk be diversified away by investing in both Inter Cars and HiProMine 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 HiProMine 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 HiProMine SA, you can compare the effects of market volatilities on Inter Cars and HiProMine 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 HiProMine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Cars and HiProMine.
Diversification Opportunities for Inter Cars and HiProMine
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Inter and HiProMine is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and HiProMine SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HiProMine 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 HiProMine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HiProMine SA has no effect on the direction of Inter Cars i.e., Inter Cars and HiProMine go up and down completely randomly.
Pair Corralation between Inter Cars and HiProMine
Assuming the 90 days trading horizon Inter Cars SA is expected to generate 0.74 times more return on investment than HiProMine. However, Inter Cars SA is 1.36 times less risky than HiProMine. It trades about 0.0 of its potential returns per unit of risk. HiProMine SA is currently generating about -0.01 per unit of risk. If you would invest 54,353 in Inter Cars SA on August 31, 2024 and sell it today you would lose (4,853) from holding Inter Cars SA or give up 8.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.7% |
| Values | Daily Returns |
Inter Cars SA vs. HiProMine SA
Performance |
| Timeline |
| Inter Cars SA |
| HiProMine SA |
Inter Cars and HiProMine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inter Cars and HiProMine
The main advantage of trading using opposite Inter Cars and HiProMine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Cars position performs unexpectedly, HiProMine 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 HiProMine will offset losses from the drop in HiProMine'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 |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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