Correlation Between 1StdibsCom and CarMax
Can any of the company-specific risk be diversified away by investing in both 1StdibsCom and CarMax 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 1StdibsCom and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 1StdibsCom and CarMax Inc, you can compare the effects of market volatilities on 1StdibsCom and CarMax 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 1StdibsCom with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of 1StdibsCom and CarMax.
Diversification Opportunities for 1StdibsCom and CarMax
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 1StdibsCom and CarMax is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding 1StdibsCom and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and 1StdibsCom 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 1StdibsCom are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of 1StdibsCom i.e., 1StdibsCom and CarMax go up and down completely randomly.
Pair Corralation between 1StdibsCom and CarMax
Given the investment horizon of 90 days 1StdibsCom is expected to under-perform the CarMax. In addition to that, 1StdibsCom is 1.25 times more volatile than CarMax Inc. It trades about -0.05 of its total potential returns per unit of risk. CarMax Inc is currently generating about 0.07 per unit of volatility. If you would invest 7,273 in CarMax Inc on September 24, 2024 and sell it today you would earn a total of 1,154 from holding CarMax Inc or generate 15.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
1StdibsCom vs. CarMax Inc
Performance |
Timeline |
1StdibsCom |
CarMax Inc |
1StdibsCom and CarMax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with 1StdibsCom and CarMax
The main advantage of trading using opposite 1StdibsCom and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 1StdibsCom position performs unexpectedly, CarMax 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 CarMax will offset losses from the drop in CarMax's long position.1StdibsCom vs. Hour Loop | 1StdibsCom vs. Liquidity Services | 1StdibsCom vs. Qurate Retail Series | 1StdibsCom vs. Emerge Commerce |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |