Correlation Between Willdan and KAR Auction
Can any of the company-specific risk be diversified away by investing in both Willdan and KAR Auction 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 Willdan and KAR Auction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willdan Group and KAR Auction Services, you can compare the effects of market volatilities on Willdan and KAR Auction 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 Willdan with a short position of KAR Auction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willdan and KAR Auction.
Diversification Opportunities for Willdan and KAR Auction
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Willdan and KAR is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Willdan Group and KAR Auction Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAR Auction Services and Willdan 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 Willdan Group are associated (or correlated) with KAR Auction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAR Auction Services has no effect on the direction of Willdan i.e., Willdan and KAR Auction go up and down completely randomly.
Pair Corralation between Willdan and KAR Auction
Given the investment horizon of 90 days Willdan Group is expected to under-perform the KAR Auction. In addition to that, Willdan is 1.39 times more volatile than KAR Auction Services. It trades about -0.09 of its total potential returns per unit of risk. KAR Auction Services is currently generating about 0.12 per unit of volatility. If you would invest 2,018 in KAR Auction Services on November 2, 2024 and sell it today you would earn a total of 57.00 from holding KAR Auction Services or generate 2.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willdan Group vs. KAR Auction Services
Performance |
| Timeline |
| Willdan Group |
| KAR Auction Services |
Willdan and KAR Auction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willdan and KAR Auction
The main advantage of trading using opposite Willdan and KAR Auction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willdan position performs unexpectedly, KAR Auction 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 KAR Auction will offset losses from the drop in KAR Auction's long position.| Willdan vs. SNC Lavalin Group | Willdan vs. WSP Global | Willdan vs. Comfort Systems USA | Willdan vs. MYR Group |
| KAR Auction vs. CarGurus | KAR Auction vs. Kingsway Financial Services | KAR Auction vs. Driven Brands Holdings | KAR Auction vs. Group 1 Automotive |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |