Correlation Between OAKTRSPECLENDNEW and Cars
Can any of the company-specific risk be diversified away by investing in both OAKTRSPECLENDNEW and Cars 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 OAKTRSPECLENDNEW and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OAKTRSPECLENDNEW and Cars Inc, you can compare the effects of market volatilities on OAKTRSPECLENDNEW and Cars 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 OAKTRSPECLENDNEW with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of OAKTRSPECLENDNEW and Cars.
Diversification Opportunities for OAKTRSPECLENDNEW and Cars
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between OAKTRSPECLENDNEW and Cars is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding OAKTRSPECLENDNEW and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of OAKTRSPECLENDNEW i.e., OAKTRSPECLENDNEW and Cars go up and down completely randomly.
Pair Corralation between OAKTRSPECLENDNEW and Cars
Assuming the 90 days trading horizon OAKTRSPECLENDNEW is expected to generate 0.64 times more return on investment than Cars. However, OAKTRSPECLENDNEW is 1.57 times less risky than Cars. It trades about 0.14 of its potential returns per unit of risk. Cars Inc is currently generating about -0.01 per unit of risk. If you would invest 1,475 in OAKTRSPECLENDNEW on September 13, 2024 and sell it today you would earn a total of 59.00 from holding OAKTRSPECLENDNEW or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
OAKTRSPECLENDNEW vs. Cars Inc
Performance |
| Timeline |
| OAKTRSPECLENDNEW |
| Cars Inc |
OAKTRSPECLENDNEW and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OAKTRSPECLENDNEW and Cars
The main advantage of trading using opposite OAKTRSPECLENDNEW and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OAKTRSPECLENDNEW position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc | OAKTRSPECLENDNEW vs. Apple Inc |
| Cars vs. Superior Plus Corp | Cars vs. SIVERS SEMICONDUCTORS AB | Cars vs. Norsk Hydro ASA | Cars vs. Reliance Steel Aluminum |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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