Correlation Between Rush Enterprises and Mister Car

Can any of the company-specific risk be diversified away by investing in both Rush Enterprises 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 Rush Enterprises and Mister Car 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 Mister Car Wash,, you can compare the effects of market volatilities on Rush Enterprises 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 Rush Enterprises with a short position of Mister Car. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Enterprises and Mister Car.

Diversification Opportunities for Rush Enterprises and Mister Car

0.54

Correlation Coefficient

Rush Enterprises  Mister Car

Very weak diversification

The 3 months correlation between Rush and Mister is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Rush Enterprises B 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 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 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 Rush Enterprises i.e., Rush Enterprises and Mister Car go up and down completely randomly.

Pair Corralation between Rush Enterprises and Mister Car

Assuming the 90 days horizon Rush Enterprises is expected to generate 1.98 times less return on investment than Mister Car. But when comparing it to its historical volatility, Rush Enterprises B is 1.03 times less risky than Mister Car. It trades about 0.07 of its potential returns per unit of risk. Mister Car Wash, is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  719.00  in Mister Car Wash, on December 28, 2024 and sell it today you would earn a total of  128.00  from holding Mister Car Wash, or generate 17.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Rush Enterprises B  vs.  Mister Car Wash,

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.

Mister Car Wash,

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mister Car Wash, are ranked lower than 11 (%) 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 Rush Enterprises and Mister Car

The main advantage of trading using opposite Rush Enterprises and Mister Car positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Enterprises 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 Rush Enterprises B 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.