Correlation Between Imedia Brands and Carvana Co

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

Diversification Opportunities for Imedia Brands and Carvana Co

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Imedia and Carvana is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Imedia Brands and Carvana Co Cl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carvana Co Cl and Imedia Brands 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 Imedia Brands are associated (or correlated) with Carvana Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carvana Co Cl has no effect on the direction of Imedia Brands i.e., Imedia Brands and Carvana Co go up and down completely randomly.

Pair Corralation between Imedia Brands and Carvana Co

Given the investment horizon of 90 days Imedia Brands is expected to generate 0.97 times more return on investment than Carvana Co. However, Imedia Brands is 1.04 times less risky than Carvana Co. It trades about -0.03 of its potential returns per unit of risk. Carvana Co Cl is currently generating about -0.07 per unit of risk. If you would invest  595.00  in Imedia Brands on February 25, 2022 and sell it today you would lose (389.00)  from holding Imedia Brands or give up 65.38% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Imedia Brands  vs.  Carvana Co Cl

 Performance (%) 
      Timeline 
Imedia Brands 
Imedia Performance
0 of 100
Over the last 90 days Imedia Brands 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 fundamental drivers remain nearly stable which may send shares a bit higher in June 2022. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Imedia Price Channel

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

Imedia Brands and Carvana Co Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Imedia Brands and Carvana Co

The main advantage of trading using opposite Imedia Brands and Carvana Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imedia Brands position performs unexpectedly, Carvana Co 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 Co will offset losses from the drop in Carvana Co's long position.
The idea behind Imedia Brands and Carvana Co Cl 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 Global Correlations module to find global opportunities by holding instruments from different markets.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
CEO Directory
Screen CEOs from public companies around the world
Go
Commodity Channel Index
Use Commodity Channel Index to analyze current equity momentum
Go
Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go