Correlation Between Mister Car and Goodfood Market
Can any of the company-specific risk be diversified away by investing in both Mister Car and Goodfood Market 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 Mister Car and Goodfood Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mister Car Wash and Goodfood Market Corp, you can compare the effects of market volatilities on Mister Car and Goodfood Market 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 Mister Car with a short position of Goodfood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mister Car and Goodfood Market.
Diversification Opportunities for Mister Car and Goodfood Market
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mister and Goodfood is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mister Car Wash and Goodfood Market Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfood Market Corp and Mister Car 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 Mister Car Wash are associated (or correlated) with Goodfood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfood Market Corp has no effect on the direction of Mister Car i.e., Mister Car and Goodfood Market go up and down completely randomly.
Pair Corralation between Mister Car and Goodfood Market
Considering the 90-day investment horizon Mister Car Wash is expected to generate 0.77 times more return on investment than Goodfood Market. However, Mister Car Wash is 1.29 times less risky than Goodfood Market. It trades about 0.06 of its potential returns per unit of risk. Goodfood Market Corp is currently generating about 0.03 per unit of risk. If you would invest 549.00 in Mister Car Wash on August 25, 2024 and sell it today you would earn a total of 251.00 from holding Mister Car Wash or generate 45.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Mister Car Wash vs. Goodfood Market Corp
Performance |
| Timeline |
| Mister Car Wash |
| Goodfood Market Corp |
Mister Car and Goodfood Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mister Car and Goodfood Market
The main advantage of trading using opposite Mister Car and Goodfood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mister Car position performs unexpectedly, Goodfood Market 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 Goodfood Market will offset losses from the drop in Goodfood Market's long position.| Mister Car vs. Bright Horizons Family | Mister Car vs. Smart Share Global | Mister Car vs. Carriage Services | Mister Car vs. Frontdoor |
| Goodfood Market vs. FitLife Brands, Common | Goodfood Market vs. HUMANA INC | Goodfood Market vs. SCOR PK | Goodfood Market vs. Aquagold 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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