Correlation Between Lithia Motors and CABKSM
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By analyzing existing cross correlation between Lithia Motors and CABKSM 6208 18 JAN 29, you can compare the effects of market volatilities on Lithia Motors and CABKSM 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 CABKSM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lithia Motors and CABKSM.
Diversification Opportunities for Lithia Motors and CABKSM
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lithia and CABKSM is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lithia Motors and CABKSM 6208 18 JAN 29 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CABKSM 6208 18 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 CABKSM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CABKSM 6208 18 has no effect on the direction of Lithia Motors i.e., Lithia Motors and CABKSM go up and down completely randomly.
Pair Corralation between Lithia Motors and CABKSM
Considering the 90-day investment horizon Lithia Motors is expected to generate 3.35 times more return on investment than CABKSM. However, Lithia Motors is 3.35 times more volatile than CABKSM 6208 18 JAN 29. It trades about 0.23 of its potential returns per unit of risk. CABKSM 6208 18 JAN 29 is currently generating about 0.07 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Lithia Motors vs. CABKSM 6208 18 JAN 29
Performance |
| Timeline |
| Lithia Motors |
| CABKSM 6208 18 |
Lithia Motors and CABKSM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lithia Motors and CABKSM
The main advantage of trading using opposite Lithia Motors and CABKSM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lithia Motors position performs unexpectedly, CABKSM 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 CABKSM will offset losses from the drop in CABKSM's long position.| Lithia Motors vs. Sonic Automotive | Lithia Motors vs. AutoNation | Lithia Motors vs. Asbury Automotive Group | Lithia Motors vs. Penske Automotive Group |
| CABKSM vs. AEP TEX INC | CABKSM vs. US BANK NATIONAL | CABKSM vs. Reliance Global Group | CABKSM vs. Bayerische Motoren Werke |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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