Correlation Between SunCar Technology and Cango
Can any of the company-specific risk be diversified away by investing in both SunCar Technology and Cango 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 SunCar Technology and Cango into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunCar Technology Group and Cango Inc, you can compare the effects of market volatilities on SunCar Technology and Cango 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 SunCar Technology with a short position of Cango. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCar Technology and Cango.
Diversification Opportunities for SunCar Technology and Cango
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SunCar and Cango is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding SunCar Technology Group and Cango Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cango Inc and SunCar Technology 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 SunCar Technology Group are associated (or correlated) with Cango. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cango Inc has no effect on the direction of SunCar Technology i.e., SunCar Technology and Cango go up and down completely randomly.
Pair Corralation between SunCar Technology and Cango
Considering the 90-day investment horizon SunCar Technology Group is expected to under-perform the Cango. In addition to that, SunCar Technology is 2.25 times more volatile than Cango Inc. It trades about -0.21 of its total potential returns per unit of risk. Cango Inc is currently generating about -0.03 per unit of volatility. If you would invest 507.00 in Cango Inc on November 8, 2024 and sell it today you would lose (23.00) from holding Cango Inc or give up 4.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunCar Technology Group vs. Cango Inc
Performance |
| Timeline |
| SunCar Technology |
| Cango Inc |
SunCar Technology and Cango Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunCar Technology and Cango
The main advantage of trading using opposite SunCar Technology and Cango positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCar Technology position performs unexpectedly, Cango 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 Cango will offset losses from the drop in Cango's long position.| SunCar Technology vs. Ultrapar Participacoes SA | SunCar Technology vs. Companhia Siderurgica Nacional | SunCar Technology vs. Dawson Geophysical |
| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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