Correlation Between Cango and Vroom, Common

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

By analyzing existing cross correlation between Cango Inc and Vroom, Common Stock, you can compare the effects of market volatilities on Cango and Vroom, Common 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 Vroom, Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cango and Vroom, Common.

Diversification Opportunities for Cango and Vroom, Common

0.1

Correlation Coefficient

Cango  Vroom, Common

Average diversification

The 3 months correlation between Cango and Vroom, is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Vroom, Common Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vroom, Common Stock 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 Vroom, Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vroom, Common Stock has no effect on the direction of Cango i.e., Cango and Vroom, Common go up and down completely randomly.

Pair Corralation between Cango and Vroom, Common

Given the investment horizon of 90 days Cango Inc is expected to under-perform the Vroom, Common. In addition to that, Cango is 1.85 times more volatile than Vroom, Common Stock. It trades about -0.04 of its total potential returns per unit of risk. Vroom, Common Stock is currently generating about 0.02 per unit of volatility. If you would invest  599.00  in Vroom, Common Stock on December 1, 2024 and sell it today you would earn a total of  1.00  from holding Vroom, Common Stock or generate 0.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	88.33%
Values	Daily Returns

Cango Inc  vs.  Vroom, Common Stock

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Vroom, Common Stock

Risk-Adjusted Performance

Weak

Over the last 90 days Vroom, Common Stock has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Vroom, Common is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cango and Vroom, Common

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

The idea behind Cango Inc and Vroom, Common Stock 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.