Correlation Between Carvana and AMERICAN
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By analyzing existing cross correlation between Carvana Co and AMERICAN HONDA FINANCE, you can compare the effects of market volatilities on Carvana and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana and AMERICAN.
Diversification Opportunities for Carvana and AMERICAN
Very good diversification
The 3 months correlation between Carvana and AMERICAN is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and AMERICAN HONDA FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HONDA FINANCE 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HONDA FINANCE has no effect on the direction of Carvana i.e., Carvana and AMERICAN go up and down completely randomly.
Pair Corralation between Carvana and AMERICAN
Given the investment horizon of 90 days Carvana Co is expected to generate 23.12 times more return on investment than AMERICAN. However, Carvana is 23.12 times more volatile than AMERICAN HONDA FINANCE. It trades about 0.18 of its potential returns per unit of risk. AMERICAN HONDA FINANCE is currently generating about 0.04 per unit of risk. If you would invest 8,267 in Carvana Co on September 3, 2024 and sell it today you would earn a total of 17,775 from holding Carvana Co or generate 215.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Carvana Co vs. AMERICAN HONDA FINANCE
Performance |
| Timeline |
| Carvana |
| AMERICAN HONDA FINANCE |
Carvana and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carvana and AMERICAN
The main advantage of trading using opposite Carvana and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group | Carvana vs. Jiuzi Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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