Correlation Between Shift Technologies and Sonic Automotive
Can any of the company-specific risk be diversified away by investing in both Shift Technologies and Sonic Automotive 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 Sonic Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shift Technologies and Sonic Automotive, you can compare the effects of market volatilities on Shift Technologies and Sonic Automotive 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 Sonic Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shift Technologies and Sonic Automotive.
Diversification Opportunities for Shift Technologies and Sonic Automotive
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shift and Sonic is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Shift Technologies and Sonic Automotive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonic Automotive 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 Sonic Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonic Automotive has no effect on the direction of Shift Technologies i.e., Shift Technologies and Sonic Automotive go up and down completely randomly.
Pair Corralation between Shift Technologies and Sonic Automotive
If you would invest 5,966 in Sonic Automotive on August 28, 2024 and sell it today you would earn a total of 997.00 from holding Sonic Automotive or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Shift Technologies vs. Sonic Automotive
Performance |
| Timeline |
| Shift Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sonic Automotive |
Shift Technologies and Sonic Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shift Technologies and Sonic Automotive
The main advantage of trading using opposite Shift Technologies and Sonic Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shift Technologies position performs unexpectedly, Sonic Automotive 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 Sonic Automotive will offset losses from the drop in Sonic Automotive's long position.| Shift Technologies vs. Carvana Co | Shift Technologies vs. CarMax Inc | Shift Technologies vs. U Power Limited | Shift Technologies vs. Vroom Inc |
| Sonic Automotive vs. Kingsway Financial Services | Sonic Automotive vs. KAR Auction Services | Sonic Automotive vs. Cango Inc | Sonic Automotive 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Stocks Directory Find actively traded stocks across global markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |