Correlation Between Shift Technologies and CarMax
Can any of the company-specific risk be diversified away by investing in both Shift Technologies 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 Shift Technologies and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift Technologies and CarMax Inc, you can compare the effects of market volatilities on Shift Technologies 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 Shift Technologies with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift Technologies and CarMax.
Diversification Opportunities for Shift Technologies and CarMax
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shift and CarMax is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Shift Technologies and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Shift Technologies 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 Shift Technologies 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 Shift Technologies i.e., Shift Technologies and CarMax go up and down completely randomly.
Pair Corralation between Shift Technologies and CarMax
If you would invest 7,431 in CarMax Inc on August 28, 2024 and sell it today you would earn a total of 1,084 from holding CarMax Inc or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Shift Technologies vs. CarMax Inc
Performance |
| Timeline |
| Shift Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CarMax Inc |
Shift Technologies and CarMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shift Technologies and CarMax
The main advantage of trading using opposite Shift Technologies and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift Technologies 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.| Shift Technologies vs. Carvana Co | Shift Technologies vs. CarMax Inc | Shift Technologies vs. U Power Limited | Shift Technologies vs. Vroom Inc |
| CarMax vs. Kingsway Financial Services | CarMax vs. KAR Auction Services | CarMax vs. Cango Inc | CarMax vs. Vroom Inc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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