Correlation Between CarMax and Edita Food
Can any of the company-specific risk be diversified away by investing in both CarMax and Edita 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 CarMax and Edita Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarMax Inc and Edita Food Industries, you can compare the effects of market volatilities on CarMax and Edita 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 CarMax with a short position of Edita Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarMax and Edita Food.
Diversification Opportunities for CarMax and Edita Food
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CarMax and Edita is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding CarMax Inc and Edita Food Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edita Food Industries and CarMax 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 CarMax Inc are associated (or correlated) with Edita Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edita Food Industries has no effect on the direction of CarMax i.e., CarMax and Edita Food go up and down completely randomly.
Pair Corralation between CarMax and Edita Food
If you would invest 200.00 in Edita Food Industries on October 20, 2024 and sell it today you would earn a total of 0.00 from holding Edita Food Industries or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
CarMax Inc vs. Edita Food Industries
Performance |
| Timeline |
| CarMax Inc |
| Edita Food Industries |
CarMax and Edita Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarMax and Edita Food
The main advantage of trading using opposite CarMax and Edita Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarMax position performs unexpectedly, Edita 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 Edita Food will offset losses from the drop in Edita Food's long position.| CarMax vs. Edita Food Industries | CarMax vs. Associated British Foods | CarMax vs. Dairy Farm International | CarMax vs. Metals Exploration Plc |
| Edita Food vs. URU Metals | Edita Food vs. AfriTin Mining | Edita Food vs. Griffin Mining | Edita Food vs. CNH Industrial NV |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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