Correlation Between KAR Auction and Civeo Corp
Can any of the company-specific risk be diversified away by investing in both KAR Auction and Civeo Corp 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 Civeo Corp 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 Civeo Corp, you can compare the effects of market volatilities on KAR Auction and Civeo Corp 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 Civeo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Civeo Corp.
Diversification Opportunities for KAR Auction and Civeo Corp
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KAR and Civeo is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Civeo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civeo Corp 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 Civeo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civeo Corp has no effect on the direction of KAR Auction i.e., KAR Auction and Civeo Corp go up and down completely randomly.
Pair Corralation between KAR Auction and Civeo Corp
Considering the 90-day investment horizon KAR Auction Services is expected to generate 1.29 times more return on investment than Civeo Corp. However, KAR Auction is 1.29 times more volatile than Civeo Corp. It trades about 0.33 of its potential returns per unit of risk. Civeo Corp is currently generating about -0.25 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. Civeo Corp
Performance |
| Timeline |
| KAR Auction Services |
| Civeo Corp |
KAR Auction and Civeo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Civeo Corp
The main advantage of trading using opposite KAR Auction and Civeo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, Civeo Corp 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 Civeo Corp will offset losses from the drop in Civeo Corp's long position.| KAR Auction vs. Bassett Furniture Industries | KAR Auction vs. Hooker Furniture | KAR Auction vs. Natuzzi SpA | KAR Auction vs. Flexsteel Industries |
| Civeo Corp vs. Network 1 Technologies | Civeo Corp vs. BrightView Holdings | Civeo Corp vs. Maximus | Civeo Corp vs. CBIZ Inc |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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