Correlation Between Cango and Cazoo
Can any of the company-specific risk be diversified away by investing in both Cango and Cazoo 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 Cango and Cazoo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cango Inc and Cazoo Group, you can compare the effects of market volatilities on Cango and Cazoo 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 Cango with a short position of Cazoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cango and Cazoo.
Diversification Opportunities for Cango and Cazoo
Very good diversification
The 3 months correlation between Cango and Cazoo is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Cazoo Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cazoo Group and Cango 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 Cango Inc are associated (or correlated) with Cazoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cazoo Group has no effect on the direction of Cango i.e., Cango and Cazoo go up and down completely randomly.
Pair Corralation between Cango and Cazoo
If you would invest 249.00 in Cango Inc on August 28, 2024 and sell it today you would earn a total of 146.00 from holding Cango Inc or generate 58.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Cango Inc vs. Cazoo Group
Performance |
| Timeline |
| Cango Inc |
| Cazoo Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cango and Cazoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cango and Cazoo
The main advantage of trading using opposite Cango and Cazoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cango position performs unexpectedly, Cazoo 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 Cazoo will offset losses from the drop in Cazoo's long position.| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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