Correlation Between INTER CARS and Ulta Beauty

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

Diversification Opportunities for INTER CARS and Ulta Beauty

0.16

Correlation Coefficient

INTER CARS  Ulta Beauty

Average diversification

The 3 months correlation between INTER and Ulta is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Ulta Beauty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ulta Beauty 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 Ulta Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ulta Beauty has no effect on the direction of INTER CARS i.e., INTER CARS and Ulta Beauty go up and down completely randomly.

Pair Corralation between INTER CARS and Ulta Beauty

Assuming the 90 days horizon INTER CARS is expected to generate 2.85 times less return on investment than Ulta Beauty. In addition to that, INTER CARS is 1.13 times more volatile than Ulta Beauty. It trades about 0.08 of its total potential returns per unit of risk. Ulta Beauty is currently generating about 0.25 per unit of volatility. If you would invest  31,620  in Ulta Beauty on April 22, 2025 and sell it today you would earn a total of  10,450  from holding Ulta Beauty or generate 33.05% return on investment over 90 days.

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

INTER CARS SA  vs.  Ulta Beauty

INTER CARS SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTER CARS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ulta Beauty

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ulta Beauty are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ulta Beauty reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTER CARS and Ulta Beauty

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

The idea behind INTER CARS SA and Ulta Beauty 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.