Correlation Between Uniper SE and CarMax
Can any of the company-specific risk be diversified away by investing in both Uniper SE and CarMax 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 Uniper SE and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uniper SE and CarMax Inc, you can compare the effects of market volatilities on Uniper SE and CarMax 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 Uniper SE with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uniper SE and CarMax.
Diversification Opportunities for Uniper SE and CarMax
Excellent diversification
The 3 months correlation between Uniper and CarMax is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Uniper SE and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Uniper SE 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 Uniper SE are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of Uniper SE i.e., Uniper SE and CarMax go up and down completely randomly.
Pair Corralation between Uniper SE and CarMax
Assuming the 90 days trading horizon Uniper SE is expected to under-perform the CarMax. In addition to that, Uniper SE is 2.1 times more volatile than CarMax Inc. It trades about -0.12 of its total potential returns per unit of risk. CarMax Inc is currently generating about -0.12 per unit of volatility. If you would invest 8,569 in CarMax Inc on September 25, 2024 and sell it today you would lose (217.00) from holding CarMax Inc or give up 2.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Uniper SE vs. CarMax Inc
Performance |
| Timeline |
| Uniper SE |
| CarMax Inc |
Uniper SE and CarMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uniper SE and CarMax
The main advantage of trading using opposite Uniper SE and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uniper SE position performs unexpectedly, CarMax 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 CarMax will offset losses from the drop in CarMax's long position.| Uniper SE vs. Mulberry Group PLC | Uniper SE vs. London Security Plc | Uniper SE vs. Triad Group PLC | Uniper SE vs. SURETRACK MON |
| CarMax vs. Uniper SE | CarMax vs. Mulberry Group PLC | CarMax vs. London Security Plc | CarMax vs. Triad Group PLC |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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