Correlation Between INTER CARS and EON SE

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

Diversification Opportunities for INTER CARS and EON SE

0.67

Correlation Coefficient

INTER CARS  EON SE

Poor diversification

The 3 months correlation between INTER and EON is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of INTER CARS i.e., INTER CARS and EON SE go up and down completely randomly.

Pair Corralation between INTER CARS and EON SE

Assuming the 90 days horizon INTER CARS SA is expected to under-perform the EON SE. In addition to that, INTER CARS is 1.0 times more volatile than EON SE. It trades about -0.05 of its total potential returns per unit of risk. EON SE is currently generating about -0.04 per unit of volatility. If you would invest  1,270  in EON SE on September 3, 2024 and sell it today you would lose (80.00) from holding EON SE or give up 6.3% of portfolio value over 90 days.

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

INTER CARS SA  vs.  EON SE

INTER CARS SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INTER CARS SA has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

EON SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EON SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EON SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTER CARS and EON SE

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

The idea behind INTER CARS SA and EON 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.