Correlation Between X Financial and CarMax
Can any of the company-specific risk be diversified away by investing in both X Financial 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 X Financial and CarMax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X Financial Class and CarMax Inc, you can compare the effects of market volatilities on X Financial 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 X Financial with a short position of CarMax. Check out your portfolio center. Please also check ongoing floating volatility patterns of X Financial and CarMax.
Diversification Opportunities for X Financial and CarMax
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between XYF and CarMax is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding X Financial Class and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and X Financial 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 X Financial Class 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 X Financial i.e., X Financial and CarMax go up and down completely randomly.
Pair Corralation between X Financial and CarMax
Considering the 90-day investment horizon X Financial Class is expected to generate 1.67 times more return on investment than CarMax. However, X Financial is 1.67 times more volatile than CarMax Inc. It trades about 0.07 of its potential returns per unit of risk. CarMax Inc is currently generating about 0.03 per unit of risk. If you would invest 349.00 in X Financial Class on October 4, 2024 and sell it today you would earn a total of 492.00 from holding X Financial Class or generate 140.97% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.8% |
Values | Daily Returns |
X Financial Class vs. CarMax Inc
Performance |
Timeline |
X Financial Class |
CarMax Inc |
X Financial and CarMax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with X Financial and CarMax
The main advantage of trading using opposite X Financial and CarMax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X Financial 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.X Financial vs. LM Funding America | X Financial vs. Nisun International Enterprise | X Financial vs. Qudian Inc | X Financial vs. FinVolution Group |
CarMax vs. CarMax Inc | CarMax vs. Anheuser Busch InBev SANV | CarMax vs. AALBERTS IND | CarMax vs. SECURITAS B |
Check out your portfolio center.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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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