Correlation Between KAR Auction and TTEC Holdings
Can any of the company-specific risk be diversified away by investing in both KAR Auction and TTEC Holdings 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 TTEC Holdings 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 TTEC Holdings, you can compare the effects of market volatilities on KAR Auction and TTEC Holdings 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 TTEC Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and TTEC Holdings.
Diversification Opportunities for KAR Auction and TTEC Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between KAR and TTEC is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and TTEC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TTEC Holdings 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 TTEC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TTEC Holdings has no effect on the direction of KAR Auction i.e., KAR Auction and TTEC Holdings go up and down completely randomly.
Pair Corralation between KAR Auction and TTEC Holdings
Considering the 90-day investment horizon KAR Auction Services is expected to generate 0.66 times more return on investment than TTEC Holdings. However, KAR Auction Services is 1.51 times less risky than TTEC Holdings. It trades about 0.33 of its potential returns per unit of risk. TTEC Holdings is currently generating about 0.01 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. TTEC Holdings
Performance |
| Timeline |
| KAR Auction Services |
| TTEC Holdings |
KAR Auction and TTEC Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and TTEC Holdings
The main advantage of trading using opposite KAR Auction and TTEC Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, TTEC Holdings 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 TTEC Holdings will offset losses from the drop in TTEC Holdings' long position.| KAR Auction vs. Bassett Furniture Industries | KAR Auction vs. Hooker Furniture | KAR Auction vs. Natuzzi SpA | KAR Auction vs. Flexsteel Industries |
| TTEC Holdings vs. ExlService Holdings | TTEC Holdings vs. Genpact Limited | TTEC Holdings vs. ASGN Inc | TTEC Holdings vs. Science Applications International |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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