Correlation Between LANDSEA GREEN and INTER CARS

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

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

Diversification Opportunities for LANDSEA GREEN and INTER CARS

0.0

Correlation Coefficient

LANDSEA GREEN  INTER CARS

Pay attention - limited upside

The 3 months correlation between LANDSEA and INTER is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN 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 LANDSEA GREEN MANAGEMENT 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 LANDSEA GREEN i.e., LANDSEA GREEN and INTER CARS go up and down completely randomly.

Pair Corralation between LANDSEA GREEN and INTER CARS

Assuming the 90 days horizon LANDSEA GREEN MANAGEMENT is expected to generate 50.73 times more return on investment than INTER CARS. However, LANDSEA GREEN is 50.73 times more volatile than INTER CARS SA. It trades about 0.1 of its potential returns per unit of risk. INTER CARS SA is currently generating about -0.01 per unit of risk. If you would invest  1.00  in LANDSEA GREEN MANAGEMENT on October 5, 2024 and sell it today you would lose (0.90) from holding LANDSEA GREEN MANAGEMENT or give up 90.0% of portfolio value over 90 days.

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

LANDSEA GREEN MANAGEMENT  vs.  INTER CARS SA

LANDSEA GREEN MANAGEMENT

Risk-Adjusted Performance

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Very Weak

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

INTER CARS SA

Risk-Adjusted Performance

0 of 100

Insignificant

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.

Pair Trading with LANDSEA GREEN and INTER CARS

The main advantage of trading using opposite LANDSEA GREEN and INTER CARS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LANDSEA GREEN 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.

The idea behind LANDSEA GREEN MANAGEMENT and INTER CARS SA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.