Correlation Between Inter Cars and Igoria Trade

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

Diversification Opportunities for Inter Cars and Igoria Trade

0.51

Correlation Coefficient

Inter Cars  Igoria Trade

Very weak diversification

The 3 months correlation between Inter and Igoria is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade 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 Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of Inter Cars i.e., Inter Cars and Igoria Trade go up and down completely randomly.

Pair Corralation between Inter Cars and Igoria Trade

Assuming the 90 days trading horizon Inter Cars SA is expected to generate 0.39 times more return on investment than Igoria Trade. However, Inter Cars SA is 2.56 times less risky than Igoria Trade. It trades about 0.02 of its potential returns per unit of risk. Igoria Trade SA is currently generating about -0.05 per unit of risk. If you would invest  52,100  in Inter Cars SA on December 30, 2024 and sell it today you would earn a total of  600.00  from holding Inter Cars SA or generate 1.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Inter Cars SA  vs.  Igoria Trade 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.

Igoria Trade SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Igoria Trade 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 April 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 Igoria Trade

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

The idea behind Inter Cars SA and Igoria Trade 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.