Correlation Between Lmp Automotive and Mister Car

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

By analyzing existing cross correlation between Lmp Automotive Holdings and Mister Car Wash,, you can compare the effects of market volatilities on Lmp Automotive and Mister Car 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 Lmp Automotive with a short position of Mister Car. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lmp Automotive and Mister Car.

Diversification Opportunities for Lmp Automotive and Mister Car

0.0

Correlation Coefficient

Lmp Automotive  Mister Car

Pay attention - limited upside

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

Pair Corralation between Lmp Automotive and Mister Car

If you would invest  733.00  in Mister Car Wash, on December 27, 2024 and sell it today you would earn a total of  114.00  from holding Mister Car Wash, or generate 15.55% return on investment over 90 days.

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

Lmp Automotive Holdings  vs.  Mister Car Wash,

Lmp Automotive Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lmp Automotive Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Lmp Automotive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mister Car Wash,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mister Car Wash, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental indicators, Mister Car showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lmp Automotive and Mister Car

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

The idea behind Lmp Automotive Holdings and Mister Car Wash, 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.