Correlation Between Copart and USS

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

By analyzing existing cross correlation between Copart Inc and USS Co, you can compare the effects of market volatilities on Copart and USS 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 Copart with a short position of USS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Copart and USS.

Diversification Opportunities for Copart and USS

-0.66

Correlation Coefficient

Copart  USS

Excellent diversification

The 3 months correlation between Copart and USS is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Copart Inc and USS Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USS Co and Copart 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 Copart Inc are associated (or correlated) with USS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USS Co has no effect on the direction of Copart i.e., Copart and USS go up and down completely randomly.

Pair Corralation between Copart and USS

Assuming the 90 days horizon Copart Inc is expected to under-perform the USS. In addition to that, Copart is 1.6 times more volatile than USS Co. It trades about -0.23 of its total potential returns per unit of risk. USS Co is currently generating about 0.12 per unit of volatility. If you would invest  860.00  in USS Co on April 25, 2025 and sell it today you would earn a total of  90.00  from holding USS Co or generate 10.47% return on investment over 90 days.

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

Copart Inc  vs.  USS Co

Copart Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Copart Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

USS Co

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in USS Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, USS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Copart and USS

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

The idea behind Copart Inc and USS Co 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.

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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.