Correlation Between INTER CARS and DATAGROUP

Can any of the company-specific risk be diversified away by investing in both INTER CARS and DATAGROUP 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 DATAGROUP 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 DATAGROUP SE, you can compare the effects of market volatilities on INTER CARS and DATAGROUP 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 DATAGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and DATAGROUP.

Diversification Opportunities for INTER CARS and DATAGROUP

0.33

Correlation Coefficient

INTER CARS  DATAGROUP

Weak diversification

The 3 months correlation between INTER and DATAGROUP is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and DATAGROUP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DATAGROUP SE 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 DATAGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DATAGROUP SE has no effect on the direction of INTER CARS i.e., INTER CARS and DATAGROUP go up and down completely randomly.

Pair Corralation between INTER CARS and DATAGROUP

Assuming the 90 days horizon INTER CARS SA is expected to generate 0.75 times more return on investment than DATAGROUP. However, INTER CARS SA is 1.33 times less risky than DATAGROUP. It trades about 0.16 of its potential returns per unit of risk. DATAGROUP SE is currently generating about 0.02 per unit of risk. If you would invest  11,040  in INTER CARS SA on October 25, 2024 and sell it today you would earn a total of  2,060  from holding INTER CARS SA or generate 18.66% 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.  DATAGROUP SE

INTER CARS SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, INTER CARS reported solid returns over the last few months and may actually be approaching a breakup point.

DATAGROUP SE

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DATAGROUP SE are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, DATAGROUP is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with INTER CARS and DATAGROUP

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

The idea behind INTER CARS SA and DATAGROUP SE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.