Correlation Between Triad Group and CarMax
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and CarMax Inc, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and CarMax.
Diversification Opportunities for Triad Group and CarMax
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triad and CarMax is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and CarMax go up and down completely randomly.
Pair Corralation between Triad Group and CarMax
Assuming the 90 days trading horizon Triad Group is expected to generate 2.95 times less return on investment than CarMax. In addition to that, Triad Group is 1.13 times more volatile than CarMax Inc. It trades about 0.02 of its total potential returns per unit of risk. CarMax Inc is currently generating about 0.06 per unit of volatility. If you would invest 7,324 in CarMax Inc on September 25, 2024 and sell it today you would earn a total of 1,028 from holding CarMax Inc or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Triad Group PLC vs. CarMax Inc
Performance |
| Timeline |
| Triad Group PLC |
| CarMax Inc |
Triad Group and CarMax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and CarMax
The main advantage of trading using opposite Triad Group and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Chocoladefabriken Lindt Spruengli | Triad Group vs. Rockwood Realisation PLC | Triad Group vs. Toyota Motor Corp | Triad Group vs. Johnson Matthey PLC |
| CarMax vs. Uniper SE | CarMax vs. Mulberry Group PLC | CarMax vs. London Security Plc | CarMax vs. Triad Group PLC |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |