Correlation Between Rush Enterprises and Cazoo

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

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

Diversification Opportunities for Rush Enterprises and Cazoo

0.0

Correlation Coefficient

Rush Enterprises  Cazoo

Pay attention - limited upside

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

Pair Corralation between Rush Enterprises and Cazoo

If you would invest  5,421  in Rush Enterprises B on December 27, 2024 and sell it today you would earn a total of  386.00  from holding Rush Enterprises B or generate 7.12% return on investment over 90 days.

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

Rush Enterprises B  vs.  Cazoo Group

Rush Enterprises B

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rush Enterprises B are ranked lower than 5 (%) 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.

Cazoo Group

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Rush Enterprises and Cazoo

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

The idea behind Rush Enterprises B and Cazoo Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.