Correlation Between SERI INDUSTRIAL and Cars
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and 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 SERI INDUSTRIAL and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Cars Inc, you can compare the effects of market volatilities on SERI INDUSTRIAL and 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 SERI INDUSTRIAL with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Cars.
Diversification Opportunities for SERI INDUSTRIAL and Cars
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SERI and Cars is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Cars go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Cars
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to under-perform the Cars. In addition to that, SERI INDUSTRIAL is 1.17 times more volatile than Cars Inc. It trades about -0.16 of its total potential returns per unit of risk. Cars Inc is currently generating about 0.14 per unit of volatility. If you would invest 1,660 in Cars Inc on November 2, 2024 and sell it today you would earn a total of 120.00 from holding Cars Inc or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Cars Inc
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Cars Inc |
SERI INDUSTRIAL and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Cars
The main advantage of trading using opposite SERI INDUSTRIAL and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, 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 Cars will offset losses from the drop in Cars' long position.| SERI INDUSTRIAL vs. TITANIUM TRANSPORTGROUP | SERI INDUSTRIAL vs. ANTA SPORTS PRODUCT | SERI INDUSTRIAL vs. Yuexiu Transport Infrastructure | SERI INDUSTRIAL vs. SPORT LISBOA E |
| Cars vs. Easy Software AG | Cars vs. Air Transport Services | Cars vs. Kingdee International Software | Cars vs. Yuexiu Transport Infrastructure |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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