Correlation Between TrueCar and Onfolio Holdings
Can any of the company-specific risk be diversified away by investing in both TrueCar and Onfolio Holdings 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 TrueCar and Onfolio Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TrueCar and Onfolio Holdings, you can compare the effects of market volatilities on TrueCar and Onfolio Holdings 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 TrueCar with a short position of Onfolio Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of TrueCar and Onfolio Holdings.
Diversification Opportunities for TrueCar and Onfolio Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TrueCar and Onfolio is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding TrueCar and Onfolio Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onfolio Holdings and TrueCar 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 TrueCar are associated (or correlated) with Onfolio Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onfolio Holdings has no effect on the direction of TrueCar i.e., TrueCar and Onfolio Holdings go up and down completely randomly.
Pair Corralation between TrueCar and Onfolio Holdings
Given the investment horizon of 90 days TrueCar is expected to generate 0.55 times more return on investment than Onfolio Holdings. However, TrueCar is 1.83 times less risky than Onfolio Holdings. It trades about 0.14 of its potential returns per unit of risk. Onfolio Holdings is currently generating about -0.07 per unit of risk. If you would invest 377.00 in TrueCar on August 28, 2024 and sell it today you would earn a total of 37.00 from holding TrueCar or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TrueCar vs. Onfolio Holdings
Performance |
| Timeline |
| TrueCar |
| Onfolio Holdings |
TrueCar and Onfolio Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TrueCar and Onfolio Holdings
The main advantage of trading using opposite TrueCar and Onfolio Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrueCar position performs unexpectedly, Onfolio Holdings 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 Onfolio Holdings will offset losses from the drop in Onfolio Holdings' long position.The idea behind TrueCar and Onfolio Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Onfolio Holdings vs. Trivago NV | Onfolio Holdings vs. Cheetah Mobile | Onfolio Holdings vs. Comscore | Onfolio Holdings vs. Arena Group Holdings |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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