Correlation Between Destination and SunCar Technology
Can any of the company-specific risk be diversified away by investing in both Destination and SunCar Technology 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 Destination and SunCar Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Destination XL Group and SunCar Technology Group, you can compare the effects of market volatilities on Destination and SunCar Technology 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 Destination with a short position of SunCar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Destination and SunCar Technology.
Diversification Opportunities for Destination and SunCar Technology
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Destination and SunCar is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Destination XL Group and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology and Destination 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 Destination XL Group are associated (or correlated) with SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of Destination i.e., Destination and SunCar Technology go up and down completely randomly.
Pair Corralation between Destination and SunCar Technology
Given the investment horizon of 90 days Destination is expected to generate 3.02 times less return on investment than SunCar Technology. But when comparing it to its historical volatility, Destination XL Group is 1.7 times less risky than SunCar Technology. It trades about 0.06 of its potential returns per unit of risk. SunCar Technology Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 31.00 in SunCar Technology Group on November 2, 2024 and sell it today you would earn a total of 2.00 from holding SunCar Technology Group or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.95% |
| Values | Daily Returns |
Destination XL Group vs. SunCar Technology Group
Performance |
| Timeline |
| Destination XL Group |
| SunCar Technology |
Destination and SunCar Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Destination and SunCar Technology
The main advantage of trading using opposite Destination and SunCar Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Destination position performs unexpectedly, SunCar Technology 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 SunCar Technology will offset losses from the drop in SunCar Technology's long position.| Destination vs. Cato Corporation | Destination vs. Zumiez Inc | Destination vs. Tillys Inc | Destination vs. Duluth Holdings |
| SunCar Technology vs. Pure Cycle | SunCar Technology vs. Newell Brands | SunCar Technology vs. Timken Company | SunCar Technology vs. Procter Gamble |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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