Correlation Between Inter Cars and Gamedust

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

Diversification Opportunities for Inter Cars and Gamedust

-0.92

Correlation Coefficient

Inter Cars  Gamedust

Pay attention - limited upside

The 3 months correlation between Inter and Gamedust is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and Gamedust SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamedust 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 Gamedust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamedust SA has no effect on the direction of Inter Cars i.e., Inter Cars and Gamedust go up and down completely randomly.

Pair Corralation between Inter Cars and Gamedust

Assuming the 90 days trading horizon Inter Cars SA is expected to generate 0.47 times more return on investment than Gamedust. However, Inter Cars SA is 2.14 times less risky than Gamedust. It trades about 0.17 of its potential returns per unit of risk. Gamedust SA is currently generating about -0.08 per unit of risk. If you would invest  49,350  in Inter Cars SA on November 29, 2024 and sell it today you would earn a total of  9,450  from holding Inter Cars SA or generate 19.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	81.03%
Values	Daily Returns

Inter Cars SA  vs.  Gamedust SA

Inter Cars SA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inter Cars SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Inter Cars reported solid returns over the last few months and may actually be approaching a breakup point.

Gamedust SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamedust SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Inter Cars and Gamedust

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

The idea behind Inter Cars SA and Gamedust 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.