Correlation Between INTER CARS and Wynn Macau

Can any of the company-specific risk be diversified away by investing in both INTER CARS and Wynn Macau 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 INTER CARS and Wynn Macau into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTER CARS SA and Wynn Macau Limited, you can compare the effects of market volatilities on INTER CARS and Wynn Macau 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 INTER CARS with a short position of Wynn Macau. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and Wynn Macau.

Diversification Opportunities for INTER CARS and Wynn Macau

0.27

Correlation Coefficient

INTER CARS  Wynn Macau

Modest diversification

The 3 months correlation between INTER and Wynn is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Wynn Macau Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Macau Limited and INTER CARS 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 INTER CARS SA are associated (or correlated) with Wynn Macau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Macau Limited has no effect on the direction of INTER CARS i.e., INTER CARS and Wynn Macau go up and down completely randomly.

Pair Corralation between INTER CARS and Wynn Macau

Assuming the 90 days horizon INTER CARS SA is expected to generate 0.68 times more return on investment than Wynn Macau. However, INTER CARS SA is 1.47 times less risky than Wynn Macau. It trades about 0.04 of its potential returns per unit of risk. Wynn Macau Limited is currently generating about -0.09 per unit of risk. If you would invest  11,760  in INTER CARS SA on October 9, 2024 and sell it today you would earn a total of  100.00  from holding INTER CARS SA or generate 0.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

INTER CARS SA  vs.  Wynn Macau Limited

INTER CARS SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, INTER CARS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Wynn Macau Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wynn Macau Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with INTER CARS and Wynn Macau

The main advantage of trading using opposite INTER CARS and Wynn Macau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, Wynn Macau 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 Wynn Macau will offset losses from the drop in Wynn Macau's long position.

The idea behind INTER CARS SA and Wynn Macau Limited 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.