Correlation Between SunCar Technology and Carvana
Can any of the company-specific risk be diversified away by investing in both SunCar Technology and Carvana 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 Carvana 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 Carvana Co, you can compare the effects of market volatilities on SunCar Technology and Carvana 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 Carvana. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCar Technology and Carvana.
Diversification Opportunities for SunCar Technology and Carvana
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SunCar and Carvana is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SunCar Technology Group and Carvana Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carvana 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 Carvana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carvana has no effect on the direction of SunCar Technology i.e., SunCar Technology and Carvana go up and down completely randomly.
Pair Corralation between SunCar Technology and Carvana
Considering the 90-day investment horizon SunCar Technology Group is expected to under-perform the Carvana. But the stock apears to be less risky and, when comparing its historical volatility, SunCar Technology Group is 1.21 times less risky than Carvana. The stock trades about 0.0 of its potential returns per unit of risk. The Carvana Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 20,502 in Carvana Co on August 28, 2024 and sell it today you would earn a total of 5,578 from holding Carvana Co or generate 27.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunCar Technology Group vs. Carvana Co
Performance |
| Timeline |
| SunCar Technology |
| Carvana |
SunCar Technology and Carvana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunCar Technology and Carvana
The main advantage of trading using opposite SunCar Technology and Carvana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCar Technology position performs unexpectedly, Carvana 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 Carvana will offset losses from the drop in Carvana's long position.| SunCar Technology vs. Ultrapar Participacoes SA | SunCar Technology vs. Companhia Siderurgica Nacional | SunCar Technology vs. Dawson Geophysical |
| Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group | Carvana vs. Jiuzi Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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