Correlation Between Carvana and Jiuzi Holdings
Can any of the company-specific risk be diversified away by investing in both Carvana and Jiuzi Holdings 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 Jiuzi Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carvana Co and Jiuzi Holdings, you can compare the effects of market volatilities on Carvana and Jiuzi Holdings 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 Jiuzi Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana and Jiuzi Holdings.
Diversification Opportunities for Carvana and Jiuzi Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carvana and Jiuzi is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and Jiuzi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiuzi 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 Jiuzi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiuzi Holdings has no effect on the direction of Carvana i.e., Carvana and Jiuzi Holdings go up and down completely randomly.
Pair Corralation between Carvana and Jiuzi Holdings
Given the investment horizon of 90 days Carvana Co is expected to generate 0.48 times more return on investment than Jiuzi Holdings. However, Carvana Co is 2.1 times less risky than Jiuzi Holdings. It trades about 0.15 of its potential returns per unit of risk. Jiuzi Holdings is currently generating about 0.03 per unit of risk. If you would invest 4,306 in Carvana Co on November 26, 2024 and sell it today you would earn a total of 17,448 from holding Carvana Co or generate 405.2% 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. Jiuzi Holdings
Performance |
Timeline |
Carvana |
Jiuzi Holdings |
Carvana and Jiuzi Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Carvana and Jiuzi Holdings
The main advantage of trading using opposite Carvana and Jiuzi Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana position performs unexpectedly, Jiuzi Holdings 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 Jiuzi Holdings will offset losses from the drop in Jiuzi Holdings' long position.Carvana vs. CarMax Inc | ||
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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