Correlation Between KAR Auction and Concentrix
Can any of the company-specific risk be diversified away by investing in both KAR Auction and Concentrix 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 KAR Auction and Concentrix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAR Auction Services and Concentrix, you can compare the effects of market volatilities on KAR Auction and Concentrix 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 KAR Auction with a short position of Concentrix. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Concentrix.
Diversification Opportunities for KAR Auction and Concentrix
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAR and Concentrix is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Concentrix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concentrix and KAR Auction 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 KAR Auction Services are associated (or correlated) with Concentrix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concentrix has no effect on the direction of KAR Auction i.e., KAR Auction and Concentrix go up and down completely randomly.
Pair Corralation between KAR Auction and Concentrix
Considering the 90-day investment horizon KAR Auction Services is expected to generate 0.86 times more return on investment than Concentrix. However, KAR Auction Services is 1.16 times less risky than Concentrix. It trades about 0.32 of its potential returns per unit of risk. Concentrix is currently generating about 0.02 per unit of risk. If you would invest 1,641 in KAR Auction Services on August 28, 2024 and sell it today you would earn a total of 379.00 from holding KAR Auction Services or generate 23.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. Concentrix
Performance |
| Timeline |
| KAR Auction Services |
| Concentrix |
KAR Auction and Concentrix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Concentrix
The main advantage of trading using opposite KAR Auction and Concentrix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, Concentrix 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 Concentrix will offset losses from the drop in Concentrix's long position.| KAR Auction vs. Bassett Furniture Industries | KAR Auction vs. Hooker Furniture | KAR Auction vs. Natuzzi SpA | KAR Auction vs. Flexsteel Industries |
| Concentrix vs. Genpact Limited | Concentrix vs. ExlService Holdings | Concentrix vs. Science Applications International | Concentrix vs. CLARIVATE PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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