Correlation Between Lithia Motors and SavWatt USA
Can any of the company-specific risk be diversified away by investing in both Lithia Motors and SavWatt USA 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 Lithia Motors and SavWatt USA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lithia Motors and SavWatt USA, you can compare the effects of market volatilities on Lithia Motors and SavWatt USA 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 Lithia Motors with a short position of SavWatt USA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithia Motors and SavWatt USA.
Diversification Opportunities for Lithia Motors and SavWatt USA
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lithia and SavWatt is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lithia Motors and SavWatt USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SavWatt USA and Lithia Motors 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 Lithia Motors are associated (or correlated) with SavWatt USA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SavWatt USA has no effect on the direction of Lithia Motors i.e., Lithia Motors and SavWatt USA go up and down completely randomly.
Pair Corralation between Lithia Motors and SavWatt USA
If you would invest 34,795 in Lithia Motors on November 4, 2024 and sell it today you would earn a total of 2,815 from holding Lithia Motors or generate 8.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Lithia Motors vs. SavWatt USA
Performance |
| Timeline |
| Lithia Motors |
| SavWatt USA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Lithia Motors and SavWatt USA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithia Motors and SavWatt USA
The main advantage of trading using opposite Lithia Motors and SavWatt USA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithia Motors position performs unexpectedly, SavWatt USA 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 SavWatt USA will offset losses from the drop in SavWatt USA's long position.| Lithia Motors vs. Sonic Automotive | Lithia Motors vs. AutoNation | Lithia Motors vs. Asbury Automotive Group | Lithia Motors vs. Penske Automotive Group |
| SavWatt USA vs. Spyre Therapeutics | SavWatt USA vs. I Mab | SavWatt USA vs. Alto Neuroscience, | SavWatt USA vs. Primo Brands |
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 CEOs Directory module to screen CEOs from public companies around the world.
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