Correlation Between Inter Cars and VR Factory

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

Diversification Opportunities for Inter Cars and VR Factory

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Inter and VRF is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Inter Cars SA and VR Factory Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VR Factory Games 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 VR Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VR Factory Games has no effect on the direction of Inter Cars i.e., Inter Cars and VR Factory go up and down completely randomly.

Pair Corralation between Inter Cars and VR Factory

Assuming the 90 days trading horizon Inter Cars SA is expected to generate 0.33 times more return on investment than VR Factory. However, Inter Cars SA is 3.03 times less risky than VR Factory. It trades about 0.07 of its potential returns per unit of risk. VR Factory Games is currently generating about 0.01 per unit of risk. If you would invest  57,452  in Inter Cars SA on April 23, 2025 and sell it today you would earn a total of  3,548  from holding Inter Cars SA or generate 6.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy96.83%
ValuesDaily Returns

Inter Cars SA  vs.  VR Factory Games

 Performance 
       Timeline  
Inter Cars SA 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
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. Even with relatively weak basic indicators, Inter Cars may actually be approaching a critical reversion point that can send shares even higher in August 2025.
VR Factory Games 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in VR Factory Games are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, VR Factory is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Inter Cars and VR Factory Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inter Cars and VR Factory

The main advantage of trading using opposite Inter Cars and VR Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inter Cars position performs unexpectedly, VR Factory 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 VR Factory will offset losses from the drop in VR Factory's long position.
The idea behind Inter Cars SA and VR Factory Games 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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