Correlation Between Stoneridge and Carvana
Can any of the company-specific risk be diversified away by investing in both Stoneridge and Carvana 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 Stoneridge and Carvana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Carvana Co, you can compare the effects of market volatilities on Stoneridge and Carvana 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 Stoneridge with a short position of Carvana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Carvana.
Diversification Opportunities for Stoneridge and Carvana
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stoneridge and Carvana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Carvana Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carvana and Stoneridge 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 Stoneridge are associated (or correlated) with Carvana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carvana has no effect on the direction of Stoneridge i.e., Stoneridge and Carvana go up and down completely randomly.
Pair Corralation between Stoneridge and Carvana
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Carvana. But the stock apears to be less risky and, when comparing its historical volatility, Stoneridge is 3.07 times less risky than Carvana. The stock trades about -0.16 of its potential returns per unit of risk. The Carvana Co is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 8,267 in Carvana Co on February 7, 2024 and sell it today you would earn a total of 3,900 from holding Carvana Co or generate 47.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Stoneridge vs. Carvana Co
Performance |
Timeline |
Stoneridge |
Carvana |
Stoneridge and Carvana Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stoneridge and Carvana
The main advantage of trading using opposite Stoneridge and Carvana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge position performs unexpectedly, Carvana 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 Carvana will offset losses from the drop in Carvana's long position.Stoneridge vs. Monro Muffler Brake | Stoneridge vs. Motorcar Parts of | Stoneridge vs. Standard Motor Products | Stoneridge vs. Douglas Dynamics |
Carvana vs. Cazoo Group | Carvana vs. CarMax Inc | Carvana vs. U Power Limited | Carvana vs. SunCar Technology Group |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
CEOs Directory Screen CEOs from public companies around the world | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |