Correlation Between SunCar Technology and Kaixin Auto
Can any of the company-specific risk be diversified away by investing in both SunCar Technology and Kaixin Auto 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 Kaixin Auto 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 Kaixin Auto Holdings, you can compare the effects of market volatilities on SunCar Technology and Kaixin Auto 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 Kaixin Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCar Technology and Kaixin Auto.
Diversification Opportunities for SunCar Technology and Kaixin Auto
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SunCar and Kaixin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding SunCar Technology Group and Kaixin Auto Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaixin Auto Holdings 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 Kaixin Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaixin Auto Holdings has no effect on the direction of SunCar Technology i.e., SunCar Technology and Kaixin Auto go up and down completely randomly.
Pair Corralation between SunCar Technology and Kaixin Auto
Considering the 90-day investment horizon SunCar Technology Group is expected to generate 0.31 times more return on investment than Kaixin Auto. However, SunCar Technology Group is 3.21 times less risky than Kaixin Auto. It trades about 0.04 of its potential returns per unit of risk. Kaixin Auto Holdings is currently generating about -0.24 per unit of risk. If you would invest 935.00 in SunCar Technology Group on August 24, 2024 and sell it today you would earn a total of 21.00 from holding SunCar Technology Group or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunCar Technology Group vs. Kaixin Auto Holdings
Performance |
| Timeline |
| SunCar Technology |
| Kaixin Auto Holdings |
SunCar Technology and Kaixin Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunCar Technology and Kaixin Auto
The main advantage of trading using opposite SunCar Technology and Kaixin Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCar Technology position performs unexpectedly, Kaixin Auto 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 Kaixin Auto will offset losses from the drop in Kaixin Auto's long position.| SunCar Technology vs. Ultrapar Participacoes SA | SunCar Technology vs. Companhia Siderurgica Nacional | SunCar Technology vs. Dawson Geophysical |
| Kaixin Auto vs. Vroom Inc | Kaixin Auto vs. Cango Inc | Kaixin Auto vs. Cars Inc | Kaixin Auto vs. KAR Auction Services |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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