Correlation Between First Physicians and CarMax
Can any of the company-specific risk be diversified away by investing in both First Physicians and CarMax 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 First Physicians and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Physicians Capital and CarMax Inc, you can compare the effects of market volatilities on First Physicians and CarMax 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 First Physicians with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Physicians and CarMax.
Diversification Opportunities for First Physicians and CarMax
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and CarMax is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Physicians Capital and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and First Physicians 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 First Physicians Capital are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of First Physicians i.e., First Physicians and CarMax go up and down completely randomly.
Pair Corralation between First Physicians and CarMax
If you would invest 6,016 in CarMax Inc on September 13, 2024 and sell it today you would earn a total of 2,662 from holding CarMax Inc or generate 44.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Physicians Capital vs. CarMax Inc
Performance |
| Timeline |
| First Physicians Capital |
| CarMax Inc |
First Physicians and CarMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Physicians and CarMax
The main advantage of trading using opposite First Physicians and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Physicians position performs unexpectedly, CarMax 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 CarMax will offset losses from the drop in CarMax's long position.| First Physicians vs. Grey Cloak Tech | First Physicians vs. CuraScientific Corp | First Physicians vs. Love Hemp Group | First Physicians vs. Greater Cannabis |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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