Correlation Between MW Trade and Inter Cars
Can any of the company-specific risk be diversified away by investing in both MW 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 MW 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 MW Trade SA and Inter Cars SA, you can compare the effects of market volatilities on MW 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 MW Trade with a short position of Inter Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Trade and Inter Cars.
Diversification Opportunities for MW Trade and Inter Cars
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MWT and Inter is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding MW Trade 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 MW 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 MW Trade 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 MW Trade i.e., MW Trade and Inter Cars go up and down completely randomly.
Pair Corralation between MW Trade and Inter Cars
Assuming the 90 days trading horizon MW Trade SA is expected to under-perform the Inter Cars. In addition to that, MW Trade is 1.55 times more volatile than Inter Cars SA. It trades about -0.13 of its total potential returns per unit of risk. Inter Cars SA is currently generating about 0.12 per unit of volatility. If you would invest 51,200 in Inter Cars SA on October 22, 2024 and sell it today you would earn a total of 6,400 from holding Inter Cars SA or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MW Trade SA vs. Inter Cars SA
Performance |
| Timeline |
| MW Trade SA |
| Inter Cars SA |
MW Trade and Inter Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MW Trade and Inter Cars
The main advantage of trading using opposite MW Trade and Inter Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MW 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.| MW Trade vs. Quantum Software SA | MW Trade vs. Saule Technologies SA | MW Trade vs. SOFTWARE MANSION SPOLKA | MW Trade vs. GreenX Metals |
| Inter Cars vs. Santander Bank Polska | Inter Cars vs. Immobile | Inter Cars vs. MW Trade SA | Inter Cars vs. LSI Software 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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