Correlation Between Carvana and Camping World
Can any of the company-specific risk be diversified away by investing in both Carvana and Camping World 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 Carvana and Camping World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carvana Co and Camping World Holdings, you can compare the effects of market volatilities on Carvana and Camping World 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 Carvana with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana and Camping World.
Diversification Opportunities for Carvana and Camping World
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carvana and Camping is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and Carvana 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 Carvana Co are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of Carvana i.e., Carvana and Camping World go up and down completely randomly.
Pair Corralation between Carvana and Camping World
Given the investment horizon of 90 days Carvana Co is expected to generate 1.64 times more return on investment than Camping World. However, Carvana is 1.64 times more volatile than Camping World Holdings. It trades about 0.16 of its potential returns per unit of risk. Camping World Holdings is currently generating about 0.01 per unit of risk. If you would invest 4,229 in Carvana Co on November 9, 2024 and sell it today you would earn a total of 22,088 from holding Carvana Co or generate 522.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carvana Co vs. Camping World Holdings
Performance |
| Timeline |
| Carvana |
| Camping World Holdings |
Carvana and Camping World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carvana and Camping World
The main advantage of trading using opposite Carvana and Camping World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana position performs unexpectedly, Camping World 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 Camping World will offset losses from the drop in Camping World's long position.| Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group | Carvana vs. Jiuzi Holdings |
| Camping World vs. Group 1 Automotive | Camping World vs. Sonic Automotive | Camping World vs. Penske Automotive Group | Camping World vs. Lithia Motors |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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