Correlation Between Shift Technologies and CarMax

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

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

Diversification Opportunities for Shift Technologies and CarMax

0.0

Correlation Coefficient

Shift Technologies  CarMax

Pay attention - limited upside

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

Pair Corralation between Shift Technologies and CarMax

If you would invest (100.00) in Shift Technologies on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Shift Technologies or generate -100.0% return on investment over 90 days.

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

Shift Technologies  vs.  CarMax Inc

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.

CarMax Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CarMax Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Shift Technologies and CarMax

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

The idea behind Shift Technologies and CarMax Inc 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 Commodity Directory module to find actively traded commodities issued by global exchanges.