Correlation Between INTER CARS and Robinhood Markets

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

Diversification Opportunities for INTER CARS and Robinhood Markets

0.43

Correlation Coefficient

INTER CARS  Robinhood Markets

Very weak diversification

The 3 months correlation between INTER and Robinhood is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and Robinhood Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robinhood Markets 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 Robinhood Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robinhood Markets has no effect on the direction of INTER CARS i.e., INTER CARS and Robinhood Markets go up and down completely randomly.

Pair Corralation between INTER CARS and Robinhood Markets

Assuming the 90 days horizon INTER CARS is expected to generate 9.41 times less return on investment than Robinhood Markets. But when comparing it to its historical volatility, INTER CARS SA is 1.62 times less risky than Robinhood Markets. It trades about 0.06 of its potential returns per unit of risk. Robinhood Markets is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  4,341  in Robinhood Markets on April 25, 2025 and sell it today you would earn a total of  4,296  from holding Robinhood Markets or generate 98.96% return on investment over 90 days.

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

INTER CARS SA  vs.  Robinhood Markets

INTER CARS SA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTER CARS SA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, INTER CARS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Robinhood Markets

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Robinhood Markets are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Robinhood Markets reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INTER CARS and Robinhood Markets

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

The idea behind INTER CARS SA and Robinhood Markets 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.