Correlation Between Inter Cars and M Food
Can any of the company-specific risk be diversified away by investing in both Inter Cars and M Food 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 M Food 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 M Food SA, you can compare the effects of market volatilities on Inter Cars and M Food 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 M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inter Cars and M Food.
Diversification Opportunities for Inter Cars and M Food
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Inter and MFD is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food 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 M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of Inter Cars i.e., Inter Cars and M Food go up and down completely randomly.
Pair Corralation between Inter Cars and M Food
Assuming the 90 days trading horizon Inter Cars is expected to generate 30.35 times less return on investment than M Food. But when comparing it to its historical volatility, Inter Cars SA is 3.93 times less risky than M Food. It trades about 0.02 of its potential returns per unit of risk. M Food SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 79.00 in M Food SA on December 29, 2024 and sell it today you would earn a total of 41.00 from holding M Food SA or generate 51.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 85.48% |
Values | Daily Returns |
Inter Cars SA vs. M Food SA
Performance |
Timeline |
Inter Cars SA |
M Food SA |
Risk-Adjusted Performance
Good
Weak | Strong |
Inter Cars and M Food Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inter Cars and M Food
The main advantage of trading using opposite Inter Cars and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Cars position performs unexpectedly, M Food 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 M Food will offset losses from the drop in M Food's long position.Inter Cars vs. True Games Syndicate | Inter Cars vs. LSI Software SA | Inter Cars vs. Noble Financials SA | Inter Cars vs. Vivid Games SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |