Correlation Between Inter Cars and Enter Air

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

Diversification Opportunities for Inter Cars and Enter Air

-0.01

Correlation Coefficient

Inter Cars  Enter Air

Good diversification

The 3 months correlation between Inter and Enter is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and Enter Air SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enter Air SA 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 Enter Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enter Air SA has no effect on the direction of Inter Cars i.e., Inter Cars and Enter Air go up and down completely randomly.

Pair Corralation between Inter Cars and Enter Air

Assuming the 90 days trading horizon Inter Cars is expected to generate 7.1 times less return on investment than Enter Air. In addition to that, Inter Cars is 1.21 times more volatile than Enter Air SA. It trades about 0.02 of its total potential returns per unit of risk. Enter Air SA is currently generating about 0.16 per unit of volatility. If you would invest  5,370  in Enter Air SA on December 29, 2024 and sell it today you would earn a total of  810.00  from holding Enter Air SA or generate 15.08% 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.  Enter Air SA

Inter Cars SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Cars SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Inter Cars is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Enter Air SA

Risk-Adjusted Performance

Good

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

Pair Trading with Inter Cars and Enter Air

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

The idea behind Inter Cars SA and Enter Air 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.