Correlation Between H2O Retailing and Carsales
Can any of the company-specific risk be diversified away by investing in both H2O Retailing and Carsales 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 H2O Retailing and Carsales into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and CarsalesCom, you can compare the effects of market volatilities on H2O Retailing and Carsales 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 H2O Retailing with a short position of Carsales. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Carsales.
Diversification Opportunities for H2O Retailing and Carsales
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between H2O and Carsales is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom and H2O Retailing 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 H2O Retailing are associated (or correlated) with Carsales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of H2O Retailing i.e., H2O Retailing and Carsales go up and down completely randomly.
Pair Corralation between H2O Retailing and Carsales
Assuming the 90 days horizon H2O Retailing is expected to generate 1.24 times more return on investment than Carsales. However, H2O Retailing is 1.24 times more volatile than CarsalesCom. It trades about 0.03 of its potential returns per unit of risk. CarsalesCom is currently generating about -0.22 per unit of risk. If you would invest 1,340 in H2O Retailing on October 11, 2024 and sell it today you would earn a total of 10.00 from holding H2O Retailing or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
H2O Retailing vs. CarsalesCom
Performance |
| Timeline |
| H2O Retailing |
| CarsalesCom |
H2O Retailing and Carsales Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and Carsales
The main advantage of trading using opposite H2O Retailing and Carsales positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing position performs unexpectedly, Carsales 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 Carsales will offset losses from the drop in Carsales' long position.| H2O Retailing vs. Thai Beverage Public | H2O Retailing vs. BJs Restaurants | H2O Retailing vs. THAI BEVERAGE | H2O Retailing vs. Luckin Coffee |
| Carsales vs. FLOW TRADERS LTD | Carsales vs. Retail Estates NV | Carsales vs. National Retail Properties | Carsales vs. H2O Retailing |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |