Correlation Between RumbleON and TheRealReal
Can any of the company-specific risk be diversified away by investing in both RumbleON and TheRealReal 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 RumbleON and TheRealReal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RumbleON and TheRealReal, you can compare the effects of market volatilities on RumbleON and TheRealReal 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 RumbleON with a short position of TheRealReal. Check out your portfolio center. Please also check ongoing floating volatility patterns of RumbleON and TheRealReal.
Diversification Opportunities for RumbleON and TheRealReal
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RumbleON and TheRealReal is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding RumbleON and TheRealReal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TheRealReal and RumbleON 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 RumbleON are associated (or correlated) with TheRealReal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TheRealReal has no effect on the direction of RumbleON i.e., RumbleON and TheRealReal go up and down completely randomly.
Pair Corralation between RumbleON and TheRealReal
Given the investment horizon of 90 days RumbleON is expected to generate 8.51 times less return on investment than TheRealReal. But when comparing it to its historical volatility, RumbleON is 1.08 times less risky than TheRealReal. It trades about 0.07 of its potential returns per unit of risk. TheRealReal is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 298.00 in TheRealReal on August 28, 2024 and sell it today you would earn a total of 235.00 from holding TheRealReal or generate 78.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RumbleON vs. TheRealReal
Performance |
| Timeline |
| RumbleON |
| TheRealReal |
RumbleON and TheRealReal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RumbleON and TheRealReal
The main advantage of trading using opposite RumbleON and TheRealReal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RumbleON position performs unexpectedly, TheRealReal 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 TheRealReal will offset losses from the drop in TheRealReal's long position.| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
| TheRealReal vs. Capri Holdings | TheRealReal vs. Movado Group | TheRealReal vs. Tapestry | TheRealReal vs. Brilliant Earth Group |
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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