Correlation Between Carvana and Uxin
Can any of the company-specific risk be diversified away by investing in both Carvana and Uxin 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 Uxin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carvana Co and Uxin, you can compare the effects of market volatilities on Carvana and Uxin 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 Uxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana and Uxin.
Diversification Opportunities for Carvana and Uxin
Poor diversification
The 3 months correlation between Carvana and Uxin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin 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 Uxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxin has no effect on the direction of Carvana i.e., Carvana and Uxin go up and down completely randomly.
Pair Corralation between Carvana and Uxin
Given the investment horizon of 90 days Carvana Co is expected to generate 0.64 times more return on investment than Uxin. However, Carvana Co is 1.57 times less risky than Uxin. It trades about 0.26 of its potential returns per unit of risk. Uxin is currently generating about 0.12 per unit of risk. If you would invest 20,502 in Carvana Co on August 28, 2024 and sell it today you would earn a total of 5,578 from holding Carvana Co or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carvana Co vs. Uxin
Performance |
| Timeline |
| Carvana |
| Uxin |
Carvana and Uxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carvana and Uxin
The main advantage of trading using opposite Carvana and Uxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana position performs unexpectedly, Uxin 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 Uxin will offset losses from the drop in Uxin's long position.| Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group | Carvana vs. Jiuzi Holdings |
| Uxin vs. Kingsway Financial Services | Uxin vs. KAR Auction Services | Uxin vs. Cango Inc | Uxin 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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