Correlation Between SVB Financial and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both SVB Financial and Credit Acceptance 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 SVB Financial and Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SVB Financial Group and Credit Acceptance, you can compare the effects of market volatilities on SVB Financial and Credit Acceptance 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 SVB Financial with a short position of Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SVB Financial and Credit Acceptance.
Diversification Opportunities for SVB Financial and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SVB and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SVB Financial Group and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance and SVB Financial 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 SVB Financial Group are associated (or correlated) with Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of SVB Financial i.e., SVB Financial and Credit Acceptance go up and down completely randomly.
Pair Corralation between SVB Financial and Credit Acceptance
Assuming the 90 days trading horizon SVB Financial Group is expected to under-perform the Credit Acceptance. In addition to that, SVB Financial is 1.52 times more volatile than Credit Acceptance. It trades about -0.04 of its total potential returns per unit of risk. Credit Acceptance is currently generating about 0.03 per unit of volatility. If you would invest 25,800 in Credit Acceptance on August 27, 2024 and sell it today you would earn a total of 6,700 from holding Credit Acceptance or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SVB Financial Group vs. Credit Acceptance
Performance |
| Timeline |
| SVB Financial Group |
| Credit Acceptance |
SVB Financial and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SVB Financial and Credit Acceptance
The main advantage of trading using opposite SVB Financial and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SVB Financial position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.| SVB Financial vs. Fras le SA | SVB Financial vs. Clave Indices De | SVB Financial vs. BTG Pactual Logstica | SVB Financial vs. Telefonaktiebolaget LM Ericsson |
| Credit Acceptance vs. Capital One Financial | Credit Acceptance vs. Bread Financial Holdings | Credit Acceptance vs. Fras le SA | Credit Acceptance vs. Clave Indices De |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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