Correlation Between Cazoo and Consumer Automotive
Can any of the company-specific risk be diversified away by investing in both Cazoo and Consumer Automotive 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 Cazoo and Consumer Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cazoo Group and Consumer Automotive Finance, you can compare the effects of market volatilities on Cazoo and Consumer Automotive 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 Cazoo with a short position of Consumer Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cazoo and Consumer Automotive.
Diversification Opportunities for Cazoo and Consumer Automotive
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cazoo and Consumer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cazoo Group and Consumer Automotive Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consumer Automotive and Cazoo 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 Cazoo Group are associated (or correlated) with Consumer Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consumer Automotive has no effect on the direction of Cazoo i.e., Cazoo and Consumer Automotive go up and down completely randomly.
Pair Corralation between Cazoo and Consumer Automotive
If you would invest 8.00 in Cazoo Group on September 3, 2024 and sell it today you would lose (7.00) from holding Cazoo Group or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 26.98% |
| Values | Daily Returns |
Cazoo Group vs. Consumer Automotive Finance
Performance |
| Timeline |
| Cazoo Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Consumer Automotive |
Cazoo and Consumer Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cazoo and Consumer Automotive
The main advantage of trading using opposite Cazoo and Consumer Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cazoo position performs unexpectedly, Consumer Automotive 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 Consumer Automotive will offset losses from the drop in Consumer Automotive's long position.The idea behind Cazoo Group and Consumer Automotive Finance pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Consumer Automotive vs. Grand Baoxin Auto | Consumer Automotive vs. AutoCanada | Consumer Automotive vs. Kaixin Auto Holdings | Consumer Automotive 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |