Correlation Between Sycamore Entmt and CarMax
Can any of the company-specific risk be diversified away by investing in both Sycamore Entmt and CarMax 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 Sycamore Entmt and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sycamore Entmt Grp and CarMax Inc, you can compare the effects of market volatilities on Sycamore Entmt and CarMax 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 Sycamore Entmt with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sycamore Entmt and CarMax.
Diversification Opportunities for Sycamore Entmt and CarMax
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sycamore and CarMax is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sycamore Entmt Grp and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Sycamore Entmt 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 Sycamore Entmt Grp are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of Sycamore Entmt i.e., Sycamore Entmt and CarMax go up and down completely randomly.
Pair Corralation between Sycamore Entmt and CarMax
Given the investment horizon of 90 days Sycamore Entmt Grp is expected to generate 8.85 times more return on investment than CarMax. However, Sycamore Entmt is 8.85 times more volatile than CarMax Inc. It trades about 0.2 of its potential returns per unit of risk. CarMax Inc is currently generating about 0.25 per unit of risk. If you would invest 0.07 in Sycamore Entmt Grp on September 13, 2024 and sell it today you would earn a total of 0.10 from holding Sycamore Entmt Grp or generate 142.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Sycamore Entmt Grp vs. CarMax Inc
Performance |
| Timeline |
| Sycamore Entmt Grp |
| CarMax Inc |
Sycamore Entmt and CarMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sycamore Entmt and CarMax
The main advantage of trading using opposite Sycamore Entmt and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sycamore Entmt position performs unexpectedly, CarMax 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 CarMax will offset losses from the drop in CarMax's long position.| Sycamore Entmt vs. Aftermaster | Sycamore Entmt vs. Lingerie Fighting Championships | Sycamore Entmt vs. Major League Football | Sycamore Entmt vs. WRIT Media 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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