Correlation Between Creotech Instruments and Inter Cars
Can any of the company-specific risk be diversified away by investing in both Creotech Instruments and Inter Cars 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 Creotech Instruments and Inter Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Creotech Instruments SA and Inter Cars SA, you can compare the effects of market volatilities on Creotech Instruments and Inter Cars 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 Creotech Instruments with a short position of Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Creotech Instruments and Inter Cars.
Diversification Opportunities for Creotech Instruments and Inter Cars
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Creotech and Inter is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Creotech Instruments SA and Inter Cars SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Cars SA and Creotech Instruments 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 Creotech Instruments SA are associated (or correlated) with Inter Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Cars SA has no effect on the direction of Creotech Instruments i.e., Creotech Instruments and Inter Cars go up and down completely randomly.
Pair Corralation between Creotech Instruments and Inter Cars
Assuming the 90 days trading horizon Creotech Instruments SA is expected to generate 1.5 times more return on investment than Inter Cars. However, Creotech Instruments is 1.5 times more volatile than Inter Cars SA. It trades about 0.04 of its potential returns per unit of risk. Inter Cars SA is currently generating about 0.02 per unit of risk. If you would invest 11,200 in Creotech Instruments SA on August 30, 2024 and sell it today you would earn a total of 3,800 from holding Creotech Instruments SA or generate 33.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Creotech Instruments SA vs. Inter Cars SA
Performance |
| Timeline |
| Creotech Instruments |
| Inter Cars SA |
Creotech Instruments and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Creotech Instruments and Inter Cars
The main advantage of trading using opposite Creotech Instruments and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Creotech Instruments position performs unexpectedly, Inter Cars 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 Inter Cars will offset losses from the drop in Inter Cars' long position.| Creotech Instruments vs. Asseco Business Solutions | Creotech Instruments vs. Detalion Games SA | Creotech Instruments vs. CFI Holding SA | Creotech Instruments vs. HM Inwest SA |
| Inter Cars vs. Banco Santander SA | Inter Cars vs. UniCredit SpA | Inter Cars vs. CEZ as | Inter Cars vs. Polski Koncern Naftowy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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