Correlation Between KAR Auction and International Money
Can any of the company-specific risk be diversified away by investing in both KAR Auction and International Money 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 International Money 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 International Money Express, you can compare the effects of market volatilities on KAR Auction and International Money 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 International Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and International Money.
Diversification Opportunities for KAR Auction and International Money
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between KAR and International is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and International Money Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Money 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 International Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Money has no effect on the direction of KAR Auction i.e., KAR Auction and International Money go up and down completely randomly.
Pair Corralation between KAR Auction and International Money
Considering the 90-day investment horizon KAR Auction Services is expected to generate 1.08 times more return on investment than International Money. However, KAR Auction is 1.08 times more volatile than International Money Express. It trades about 0.33 of its potential returns per unit of risk. International Money Express is currently generating about 0.31 per unit of risk. If you would invest 1,624 in KAR Auction Services on August 31, 2024 and sell it today you would earn a total of 387.00 from holding KAR Auction Services or generate 23.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. International Money Express
Performance |
| Timeline |
| KAR Auction Services |
| International Money |
KAR Auction and International Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and International Money
The main advantage of trading using opposite KAR Auction and International Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, International Money 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 International Money will offset losses from the drop in International Money'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 |
| International Money vs. NetScout Systems | International Money vs. Consensus Cloud Solutions | International Money vs. CSG Systems International | International Money vs. EverCommerce |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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