Correlation Between CarMax and Bondbloxx ETF
Can any of the company-specific risk be diversified away by investing in both CarMax and Bondbloxx ETF 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 CarMax and Bondbloxx ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarMax Inc and Bondbloxx ETF Trust, you can compare the effects of market volatilities on CarMax and Bondbloxx ETF 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 CarMax with a short position of Bondbloxx ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarMax and Bondbloxx ETF.
Diversification Opportunities for CarMax and Bondbloxx ETF
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CarMax and Bondbloxx is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CarMax Inc and Bondbloxx ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bondbloxx ETF Trust and CarMax 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 CarMax Inc are associated (or correlated) with Bondbloxx ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bondbloxx ETF Trust has no effect on the direction of CarMax i.e., CarMax and Bondbloxx ETF go up and down completely randomly.
Pair Corralation between CarMax and Bondbloxx ETF
Considering the 90-day investment horizon CarMax Inc is expected to generate 15.2 times more return on investment than Bondbloxx ETF. However, CarMax is 15.2 times more volatile than Bondbloxx ETF Trust. It trades about 0.04 of its potential returns per unit of risk. Bondbloxx ETF Trust is currently generating about 0.1 per unit of risk. If you would invest 6,016 in CarMax Inc on September 13, 2024 and sell it today you would earn a total of 2,662 from holding CarMax Inc or generate 44.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarMax Inc vs. Bondbloxx ETF Trust
Performance |
| Timeline |
| CarMax Inc |
| Bondbloxx ETF Trust |
CarMax and Bondbloxx ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarMax and Bondbloxx ETF
The main advantage of trading using opposite CarMax and Bondbloxx ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarMax position performs unexpectedly, Bondbloxx ETF 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 Bondbloxx ETF will offset losses from the drop in Bondbloxx ETF's long position.The idea behind CarMax Inc and Bondbloxx ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust | Bondbloxx ETF vs. Bondbloxx ETF Trust |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |