Correlation Between Globe Trade and Inter Cars
Can any of the company-specific risk be diversified away by investing in both Globe Trade 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 Globe Trade and Inter Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Globe Trade Centre and Inter Cars SA, you can compare the effects of market volatilities on Globe Trade 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 Globe Trade with a short position of Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globe Trade and Inter Cars.
Diversification Opportunities for Globe Trade and Inter Cars
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Globe and Inter is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Globe Trade Centre 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 Globe Trade 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 Globe Trade Centre 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 Globe Trade i.e., Globe Trade and Inter Cars go up and down completely randomly.
Pair Corralation between Globe Trade and Inter Cars
Assuming the 90 days trading horizon Globe Trade Centre is expected to under-perform the Inter Cars. In addition to that, Globe Trade is 1.47 times more volatile than Inter Cars SA. It trades about -0.02 of its total potential returns per unit of risk. Inter Cars SA is currently generating about 0.0 per unit of volatility. If you would invest 52,657 in Inter Cars SA on September 2, 2024 and sell it today you would lose (3,307) from holding Inter Cars SA or give up 6.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Globe Trade Centre vs. Inter Cars SA
Performance |
| Timeline |
| Globe Trade Centre |
| Inter Cars SA |
Globe Trade and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Globe Trade and Inter Cars
The main advantage of trading using opposite Globe Trade and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globe Trade 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.The idea behind Globe Trade Centre and Inter Cars SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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