Correlation Between Cango and Shift Technologies
Can any of the company-specific risk be diversified away by investing in both Cango and Shift Technologies 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 Shift Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cango Inc and Shift Technologies, you can compare the effects of market volatilities on Cango and Shift Technologies 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 Shift Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cango and Shift Technologies.
Diversification Opportunities for Cango and Shift Technologies
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cango and Shift is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Shift Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift Technologies 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 Shift Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift Technologies has no effect on the direction of Cango i.e., Cango and Shift Technologies go up and down completely randomly.
Pair Corralation between Cango and Shift Technologies
If you would invest 180.00 in Cango Inc on August 24, 2024 and sell it today you would earn a total of 210.00 from holding Cango Inc or generate 116.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Cango Inc vs. Shift Technologies
Performance |
| Timeline |
| Cango Inc |
| Shift Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cango and Shift Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cango and Shift Technologies
The main advantage of trading using opposite Cango and Shift Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cango position performs unexpectedly, Shift Technologies 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 Shift Technologies will offset losses from the drop in Shift Technologies' long position.| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
| Shift Technologies vs. Carvana Co | Shift Technologies vs. CarMax Inc | Shift Technologies vs. U Power Limited | Shift Technologies vs. Vroom Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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