Correlation Between Cango and Rush Enterprises

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

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

Diversification Opportunities for Cango and Rush Enterprises

0.0

Correlation Coefficient

Cango  Rush Enterprises

Pay attention - limited upside

The 3 months correlation between Cango and Rush is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Rush Enterprises B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rush Enterprises B and Cango 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 Cango Inc 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 B has no effect on the direction of Cango i.e., Cango and Rush Enterprises go up and down completely randomly.

Pair Corralation between Cango and Rush Enterprises

Given the investment horizon of 90 days Cango Inc is expected to under-perform the Rush Enterprises. In addition to that, Cango is 2.76 times more volatile than Rush Enterprises B. It trades about -0.02 of its total potential returns per unit of risk. Rush Enterprises B is currently generating about 0.06 per unit of volatility. If you would invest  5,502  in Rush Enterprises B on December 25, 2024 and sell it today you would earn a total of  357.00  from holding Rush Enterprises B or generate 6.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cango Inc  vs.  Rush Enterprises B

Cango Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cango Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Rush Enterprises B

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Enterprises B are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent technical indicators, Rush Enterprises may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Cango and Rush Enterprises

The main advantage of trading using opposite Cango and Rush Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cango 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 Cango Inc and Rush Enterprises B 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.