Correlation Between Carvana and Shift Technologies

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

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

Diversification Opportunities for Carvana and Shift Technologies

0.0

Correlation Coefficient

Carvana  Shift Technologies

Pay attention - limited upside

The 3 months correlation between Carvana and Shift is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co and Shift Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift Technologies and Carvana 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 Carvana Co are associated (or correlated) with Shift Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift Technologies has no effect on the direction of Carvana i.e., Carvana and Shift Technologies go up and down completely randomly.

Pair Corralation between Carvana and Shift Technologies

If you would invest  21,055  in Carvana Co on December 28, 2024 and sell it today you would lose (660.00) from holding Carvana Co or give up 3.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Carvana Co  vs.  Shift Technologies

Carvana

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Carvana Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Carvana is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Shift Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shift Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Shift Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Carvana and Shift Technologies

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

The idea behind Carvana Co and Shift Technologies 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.