Correlation Between INTER CARS and Biogen

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

Diversification Opportunities for INTER CARS and Biogen

-0.25

Correlation Coefficient

INTER CARS  Biogen

Very good diversification

The 3 months correlation between INTER and Biogen is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of INTER CARS i.e., INTER CARS and Biogen go up and down completely randomly.

Pair Corralation between INTER CARS and Biogen

Assuming the 90 days horizon INTER CARS SA is expected to generate 0.95 times more return on investment than Biogen. However, INTER CARS SA is 1.05 times less risky than Biogen. It trades about 0.06 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.07 per unit of risk. If you would invest  11,780  in INTER CARS SA on December 24, 2024 and sell it today you would earn a total of  780.00  from holding INTER CARS SA or generate 6.62% return on investment over 90 days.

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

INTER CARS SA  vs.  Biogen Inc

INTER CARS SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTER CARS may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Biogen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with INTER CARS and Biogen

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

The idea behind INTER CARS SA and Biogen Inc 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.