Correlation Between Civeo Corp and KAR Auction
Can any of the company-specific risk be diversified away by investing in both Civeo Corp and KAR Auction 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 Civeo Corp and KAR Auction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Civeo Corp and KAR Auction Services, you can compare the effects of market volatilities on Civeo Corp and KAR Auction 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 Civeo Corp with a short position of KAR Auction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Civeo Corp and KAR Auction.
Diversification Opportunities for Civeo Corp and KAR Auction
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Civeo and KAR is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and KAR Auction Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAR Auction Services and Civeo Corp 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 Civeo Corp are associated (or correlated) with KAR Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAR Auction Services has no effect on the direction of Civeo Corp i.e., Civeo Corp and KAR Auction go up and down completely randomly.
Pair Corralation between Civeo Corp and KAR Auction
Given the investment horizon of 90 days Civeo Corp is expected to generate 10.57 times less return on investment than KAR Auction. In addition to that, Civeo Corp is 1.29 times more volatile than KAR Auction Services. It trades about 0.0 of its total potential returns per unit of risk. KAR Auction Services is currently generating about 0.05 per unit of volatility. If you would invest 1,388 in KAR Auction Services on August 24, 2024 and sell it today you would earn a total of 606.00 from holding KAR Auction Services or generate 43.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Civeo Corp vs. KAR Auction Services
Performance |
| Timeline |
| Civeo Corp |
| KAR Auction Services |
Civeo Corp and KAR Auction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Civeo Corp and KAR Auction
The main advantage of trading using opposite Civeo Corp and KAR Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civeo Corp position performs unexpectedly, KAR Auction 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 KAR Auction will offset losses from the drop in KAR Auction's long position.| Civeo Corp vs. Network 1 Technologies | Civeo Corp vs. BrightView Holdings | Civeo Corp vs. Maximus | Civeo Corp vs. CBIZ Inc |
| KAR Auction vs. CarGurus | KAR Auction vs. Kingsway Financial Services | KAR Auction vs. Driven Brands Holdings | KAR Auction vs. Group 1 Automotive |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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