Correlation Between HyreCar and Aarons

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

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

Diversification Opportunities for HyreCar and Aarons

-0.74

Correlation Coefficient

HyreCar  Aarons

Pay attention - limited upside

The 3 months correlation between HyreCar and Aarons is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding HyreCar and The Aarons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aarons and HyreCar 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 HyreCar are associated (or correlated) with Aarons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aarons has no effect on the direction of HyreCar i.e., HyreCar and Aarons go up and down completely randomly.

Pair Corralation between HyreCar and Aarons

Assuming the 90 days horizon HyreCar is expected to under-perform the Aarons. In addition to that, HyreCar is 31.35 times more volatile than The Aarons. It trades about -0.13 of its total potential returns per unit of risk. The Aarons is currently generating about 0.26 per unit of volatility. If you would invest  985.00  in The Aarons on September 4, 2024 and sell it today you would earn a total of  24.00  from holding The Aarons or generate 2.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	36.51%
Values	Daily Returns

HyreCar  vs.  The Aarons

HyreCar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HyreCar has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Aarons

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days The Aarons has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very uncertain basic indicators, Aarons may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with HyreCar and Aarons

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

The idea behind HyreCar and The Aarons 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.