Correlation Between United States and INTER CARS
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and INTER CARS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and INTER CARS SA, you can compare the effects of market volatilities on United States 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 United States with a short position of INTER CARS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and INTER CARS.
Diversification Opportunities for United States and INTER CARS
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and INTER is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel 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 United States 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 United States Steel 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 United States i.e., United States and INTER CARS go up and down completely randomly.
Pair Corralation between United States and INTER CARS
Assuming the 90 days trading horizon United States Steel is expected to generate 1.44 times more return on investment than INTER CARS. However, United States is 1.44 times more volatile than INTER CARS SA. It trades about 0.02 of its potential returns per unit of risk. INTER CARS SA is currently generating about 0.0 per unit of risk. If you would invest 3,105 in United States Steel on September 15, 2024 and sell it today you would earn a total of 125.00 from holding United States Steel or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. INTER CARS SA
Performance |
| Timeline |
| United States Steel |
| INTER CARS SA |
United States and INTER CARS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and INTER CARS
The main advantage of trading using opposite United States and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. NIPPON STEEL SPADR | United States vs. Reliance Steel Aluminum | United States vs. Superior Plus Corp | United States vs. SIVERS SEMICONDUCTORS AB |
| INTER CARS vs. Bridgestone | INTER CARS vs. Superior Plus Corp | INTER CARS vs. SIVERS SEMICONDUCTORS AB | INTER CARS vs. Norsk Hydro ASA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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