Correlation Between Carsales and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both Carsales and VARIOUS EATERIES 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 Carsales and VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and VARIOUS EATERIES LS, you can compare the effects of market volatilities on Carsales and VARIOUS EATERIES 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 Carsales with a short position of VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and VARIOUS EATERIES.
Diversification Opportunities for Carsales and VARIOUS EATERIES
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carsales and VARIOUS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES and Carsales 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 CarsalesCom are associated (or correlated) with VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of Carsales i.e., Carsales and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between Carsales and VARIOUS EATERIES
Assuming the 90 days horizon CarsalesCom is expected to generate 0.64 times more return on investment than VARIOUS EATERIES. However, CarsalesCom is 1.56 times less risky than VARIOUS EATERIES. It trades about 0.1 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about -0.03 per unit of risk. If you would invest 1,236 in CarsalesCom on September 5, 2024 and sell it today you would earn a total of 1,324 from holding CarsalesCom or generate 107.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CarsalesCom vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| CarsalesCom |
| VARIOUS EATERIES |
Carsales and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and VARIOUS EATERIES
The main advantage of trading using opposite Carsales and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| Carsales vs. Fast Retailing Co | Carsales vs. Vastned Retail NV | Carsales vs. DiamondRock Hospitality | Carsales vs. Bumrungrad Hospital Public |
| VARIOUS EATERIES vs. CarsalesCom | VARIOUS EATERIES vs. Gaztransport Technigaz SA | VARIOUS EATERIES vs. BII Railway Transportation | VARIOUS EATERIES vs. QUEEN S ROAD |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |