Correlation Between CarMax and EIDESVIK OFFSHORE
Can any of the company-specific risk be diversified away by investing in both CarMax and EIDESVIK OFFSHORE 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 CarMax and EIDESVIK OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarMax Inc and EIDESVIK OFFSHORE NK, you can compare the effects of market volatilities on CarMax and EIDESVIK OFFSHORE 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 CarMax with a short position of EIDESVIK OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarMax and EIDESVIK OFFSHORE.
Diversification Opportunities for CarMax and EIDESVIK OFFSHORE
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CarMax and EIDESVIK is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CarMax Inc and EIDESVIK OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EIDESVIK OFFSHORE and CarMax 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 CarMax Inc are associated (or correlated) with EIDESVIK OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EIDESVIK OFFSHORE has no effect on the direction of CarMax i.e., CarMax and EIDESVIK OFFSHORE go up and down completely randomly.
Pair Corralation between CarMax and EIDESVIK OFFSHORE
Assuming the 90 days horizon CarMax Inc is expected to under-perform the EIDESVIK OFFSHORE. But the stock apears to be less risky and, when comparing its historical volatility, CarMax Inc is 1.02 times less risky than EIDESVIK OFFSHORE. The stock trades about -0.1 of its potential returns per unit of risk. The EIDESVIK OFFSHORE NK is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 107.00 in EIDESVIK OFFSHORE NK on October 28, 2024 and sell it today you would earn a total of 6.00 from holding EIDESVIK OFFSHORE NK or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarMax Inc vs. EIDESVIK OFFSHORE NK
Performance |
| Timeline |
| CarMax Inc |
| EIDESVIK OFFSHORE |
CarMax and EIDESVIK OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarMax and EIDESVIK OFFSHORE
The main advantage of trading using opposite CarMax and EIDESVIK OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarMax position performs unexpectedly, EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE will offset losses from the drop in EIDESVIK OFFSHORE's long position.| CarMax vs. SOFI TECHNOLOGIES | CarMax vs. Allegheny Technologies Incorporated | CarMax vs. Firan Technology Group | CarMax vs. VELA TECHNOLPLC LS 0001 |
| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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