Correlation Between Shift Technologies and Carvana

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

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

Diversification Opportunities for Shift Technologies and Carvana

0.0

Correlation Coefficient

Shift Technologies  Carvana

Pay attention - limited upside

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

Pair Corralation between Shift Technologies and Carvana

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

Shift Technologies  vs.  Carvana Co

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.

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.

Pair Trading with Shift Technologies and Carvana

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

The idea behind Shift Technologies and Carvana Co 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.