Correlation Between KAR Auction and Uxin
Can any of the company-specific risk be diversified away by investing in both KAR Auction and Uxin 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 Uxin 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 Uxin, you can compare the effects of market volatilities on KAR Auction and Uxin 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 Uxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Uxin.
Diversification Opportunities for KAR Auction and Uxin
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KAR and Uxin is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin 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 Uxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxin has no effect on the direction of KAR Auction i.e., KAR Auction and Uxin go up and down completely randomly.
Pair Corralation between KAR Auction and Uxin
Considering the 90-day investment horizon KAR Auction Services is expected to generate 0.24 times more return on investment than Uxin. However, KAR Auction Services is 4.13 times less risky than Uxin. It trades about 0.05 of its potential returns per unit of risk. Uxin is currently generating about -0.01 per unit of risk. If you would invest 1,388 in KAR Auction Services on August 24, 2024 and sell it today you would earn a total of 606.00 from holding KAR Auction Services or generate 43.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. Uxin
Performance |
| Timeline |
| KAR Auction Services |
| Uxin |
KAR Auction and Uxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Uxin
The main advantage of trading using opposite KAR Auction and Uxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction position performs unexpectedly, Uxin 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 Uxin will offset losses from the drop in Uxin'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 |
| Uxin vs. Kingsway Financial Services | Uxin vs. KAR Auction Services | Uxin vs. Cango Inc | Uxin vs. Vroom 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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