Correlation Between Driven Brands and Maximus
Can any of the company-specific risk be diversified away by investing in both Driven Brands and Maximus 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 Driven Brands and Maximus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and Maximus, you can compare the effects of market volatilities on Driven Brands and Maximus 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 Driven Brands with a short position of Maximus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and Maximus.
Diversification Opportunities for Driven Brands and Maximus
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Driven and Maximus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and Maximus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maximus and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with Maximus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maximus has no effect on the direction of Driven Brands i.e., Driven Brands and Maximus go up and down completely randomly.
Pair Corralation between Driven Brands and Maximus
Given the investment horizon of 90 days Driven Brands Holdings is expected to generate 1.87 times more return on investment than Maximus. However, Driven Brands is 1.87 times more volatile than Maximus. It trades about 0.05 of its potential returns per unit of risk. Maximus is currently generating about -0.02 per unit of risk. If you would invest 1,315 in Driven Brands Holdings on August 26, 2024 and sell it today you would earn a total of 354.00 from holding Driven Brands Holdings or generate 26.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driven Brands Holdings vs. Maximus
Performance |
| Timeline |
| Driven Brands Holdings |
| Maximus |
Driven Brands and Maximus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and Maximus
The main advantage of trading using opposite Driven Brands and Maximus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, Maximus 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 Maximus will offset losses from the drop in Maximus' long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| Maximus vs. Oneconnect Financial Technology | Maximus vs. Global Business Travel | Maximus vs. Alight Inc | Maximus vs. CS Disco LLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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