Correlation Between ACV Auctions and Rush Enterprises

Can any of the company-specific risk be diversified away by investing in both ACV Auctions and Rush Enterprises 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 ACV Auctions and Rush Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACV Auctions and Rush Enterprises A, you can compare the effects of market volatilities on ACV Auctions and Rush Enterprises 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 ACV Auctions with a short position of Rush Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACV Auctions and Rush Enterprises.

Diversification Opportunities for ACV Auctions and Rush Enterprises

0.53

Correlation Coefficient

ACV Auctions  Rush Enterprises

Very weak diversification

The 3 months correlation between ACV and Rush is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding ACV Auctions and Rush Enterprises A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rush Enterprises A and ACV Auctions 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 ACV Auctions are associated (or correlated) with Rush Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rush Enterprises A has no effect on the direction of ACV Auctions i.e., ACV Auctions and Rush Enterprises go up and down completely randomly.

Pair Corralation between ACV Auctions and Rush Enterprises

Given the investment horizon of 90 days ACV Auctions is expected to generate 5.31 times less return on investment than Rush Enterprises. In addition to that, ACV Auctions is 1.18 times more volatile than Rush Enterprises A. It trades about 0.02 of its total potential returns per unit of risk. Rush Enterprises A is currently generating about 0.14 per unit of volatility. If you would invest  5,054  in Rush Enterprises A on September 14, 2024 and sell it today you would earn a total of  966.00  from holding Rush Enterprises A or generate 19.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ACV Auctions  vs.  Rush Enterprises A

ACV Auctions

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ACV Auctions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ACV Auctions is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Rush Enterprises A

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Enterprises A are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical indicators, Rush Enterprises sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACV Auctions and Rush Enterprises

The main advantage of trading using opposite ACV Auctions and Rush Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACV Auctions position performs unexpectedly, Rush Enterprises 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 Rush Enterprises will offset losses from the drop in Rush Enterprises' long position.

The idea behind ACV Auctions and Rush Enterprises A 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..