Correlation Between KAR Auction and Esports Entertainment
Can any of the company-specific risk be diversified away by investing in both KAR Auction and Esports Entertainment 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 Esports Entertainment 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 Esports Entertainment Group, you can compare the effects of market volatilities on KAR Auction and Esports Entertainment 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 Esports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Esports Entertainment.
Diversification Opportunities for KAR Auction and Esports Entertainment
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between KAR and Esports is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Esports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Esports Entertainment 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 Esports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Esports Entertainment has no effect on the direction of KAR Auction i.e., KAR Auction and Esports Entertainment go up and down completely randomly.
Pair Corralation between KAR Auction and Esports Entertainment
If you would invest 1,434 in KAR Auction Services on September 3, 2024 and sell it today you would earn a total of 574.00 from holding KAR Auction Services or generate 40.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.4% |
| Values | Daily Returns |
KAR Auction Services vs. Esports Entertainment Group
Performance |
| Timeline |
| KAR Auction Services |
| Esports Entertainment |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KAR Auction and Esports Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Esports Entertainment
The main advantage of trading using opposite KAR Auction and Esports Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, Esports Entertainment 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 Esports Entertainment will offset losses from the drop in Esports Entertainment'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 |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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