Correlation Between DFS Furniture and INTER CARS
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and INTER CARS SA, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and INTER CARS.
Diversification Opportunities for DFS Furniture and INTER CARS
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DFS and INTER is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and INTER CARS go up and down completely randomly.
Pair Corralation between DFS Furniture and INTER CARS
Assuming the 90 days trading horizon DFS Furniture is expected to generate 2.07 times less return on investment than INTER CARS. In addition to that, DFS Furniture is 1.09 times more volatile than INTER CARS SA. It trades about 0.11 of its total potential returns per unit of risk. INTER CARS SA is currently generating about 0.25 per unit of volatility. If you would invest 10,460 in INTER CARS SA on September 1, 2024 and sell it today you would earn a total of 1,060 from holding INTER CARS SA or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. INTER CARS SA
Performance |
| Timeline |
| DFS Furniture PLC |
| INTER CARS SA |
DFS Furniture and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and INTER CARS
The main advantage of trading using opposite DFS Furniture and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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's long position.| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc |
| INTER CARS vs. Commercial Vehicle Group | INTER CARS vs. Zijin Mining Group | INTER CARS vs. GEELY AUTOMOBILE | INTER CARS vs. Grupo Carso SAB |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |