Correlation Between Carvana Co and Lightinthebox Holding

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Carvana Co and Lightinthebox Holding 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 Carvana Co and Lightinthebox Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carvana Co Cl and Lightinthebox Holding Co, you can compare the effects of market volatilities on Carvana Co and Lightinthebox Holding 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 Carvana Co with a short position of Lightinthebox Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carvana Co and Lightinthebox Holding.

Diversification Opportunities for Carvana Co and Lightinthebox Holding

-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Carvana and Lightinthebox is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Carvana Co Cl and Lightinthebox Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightinthebox Holding and Carvana Co 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 Carvana Co Cl are associated (or correlated) with Lightinthebox Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightinthebox Holding has no effect on the direction of Carvana Co i.e., Carvana Co and Lightinthebox Holding go up and down completely randomly.

Pair Corralation between Carvana Co and Lightinthebox Holding

Given the investment horizon of 90 days Carvana Co Cl is expected to under-perform the Lightinthebox Holding. But the stock apears to be less risky and, when comparing its historical volatility, Carvana Co Cl is 1.28 times less risky than Lightinthebox Holding. The stock trades about -0.02 of its potential returns per unit of risk. The Lightinthebox Holding Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  81.00  in Lightinthebox Holding Co on February 27, 2022 and sell it today you would earn a total of  36.00  from holding Lightinthebox Holding Co or generate 44.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Carvana Co Cl  vs.  Lightinthebox Holding Co

 Performance (%) 
      Timeline 
Carvana Co Cl 
Carvana Performance
0 of 100
Over the last 90 days Carvana Co Cl has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Carvana Price Channel

Lightinthebox Holding 
Lightinthebox Performance
0 of 100
Over the last 90 days Lightinthebox Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Lightinthebox Holding is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Lightinthebox Price Channel

Carvana Co and Lightinthebox Holding Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Carvana Co and Lightinthebox Holding

The main advantage of trading using opposite Carvana Co and Lightinthebox Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carvana Co position performs unexpectedly, Lightinthebox Holding 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 Lightinthebox Holding will offset losses from the drop in Lightinthebox Holding's long position.
The idea behind Carvana Co Cl and Lightinthebox Holding 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.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Transaction History
View history of all your transactions and understand their impact on performance
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Go
Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Money Flow Index
Determine momentum by analyzing Money Flow Index and other technical indicators
Go
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
Go
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go