Correlation Between KAR Auction and Grand Baoxin
Can any of the company-specific risk be diversified away by investing in both KAR Auction and Grand Baoxin 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 Grand Baoxin 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 Grand Baoxin Auto, you can compare the effects of market volatilities on KAR Auction and Grand Baoxin 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 Grand Baoxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Grand Baoxin.
Diversification Opportunities for KAR Auction and Grand Baoxin
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KAR and Grand is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Grand Baoxin Auto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Baoxin Auto 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 Grand Baoxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Baoxin Auto has no effect on the direction of KAR Auction i.e., KAR Auction and Grand Baoxin go up and down completely randomly.
Pair Corralation between KAR Auction and Grand Baoxin
If you would invest 2,085 in KAR Auction Services on November 28, 2024 and sell it today you would earn a total of 56.00 from holding KAR Auction Services or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. Grand Baoxin Auto
Performance |
| Timeline |
| KAR Auction Services |
| Grand Baoxin Auto |
KAR Auction and Grand Baoxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Grand Baoxin
The main advantage of trading using opposite KAR Auction and Grand Baoxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, Grand Baoxin 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 Grand Baoxin will offset losses from the drop in Grand Baoxin's long position.| KAR Auction vs. CarGurus | KAR Auction vs. Kingsway Financial Services | KAR Auction vs. Driven Brands Holdings | KAR Auction vs. Group 1 Automotive |
| Grand Baoxin vs. Consumer Automotive Finance | Grand Baoxin vs. AutoCanada | Grand Baoxin vs. Kaixin Auto Holdings | Grand Baoxin vs. Uxin |
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 Stocks Directory module to find actively traded stocks across global markets.
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