Correlation Between Tyson Foods and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both Tyson Foods and Credit Acceptance 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 Tyson Foods and Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Credit Acceptance, you can compare the effects of market volatilities on Tyson Foods and Credit Acceptance 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 Tyson Foods with a short position of Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Credit Acceptance.
Diversification Opportunities for Tyson Foods and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tyson and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance and Tyson Foods 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 Tyson Foods are associated (or correlated) with Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of Tyson Foods i.e., Tyson Foods and Credit Acceptance go up and down completely randomly.
Pair Corralation between Tyson Foods and Credit Acceptance
If you would invest 33,558 in Tyson Foods on August 24, 2024 and sell it today you would earn a total of 3,738 from holding Tyson Foods or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Credit Acceptance
Performance |
| Timeline |
| Tyson Foods |
| Credit Acceptance |
Tyson Foods and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Credit Acceptance
The main advantage of trading using opposite Tyson Foods and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.The idea behind Tyson Foods and Credit Acceptance 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.| Credit Acceptance vs. Capital One Financial | Credit Acceptance vs. Bread Financial Holdings | Credit Acceptance vs. Fras le SA | Credit Acceptance vs. Clave Indices De |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |