Correlation Between Kar Auction and AC MOORE

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Can any of the company-specific risk be diversified away by investing in both Kar Auction and AC MOORE 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 Kar Auction and AC MOORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kar Auction Services and AC MOORE ARTS, you can compare the effects of market volatilities on Kar Auction and AC MOORE 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 Kar Auction with a short position of AC MOORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kar Auction and AC MOORE.

Diversification Opportunities for Kar Auction and AC MOORE

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Kar Auction and ACMR1 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kar Auction Services and AC MOORE ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AC MOORE ARTS and Kar Auction 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 Kar Auction Services are associated (or correlated) with AC MOORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AC MOORE ARTS has no effect on the direction of Kar Auction i.e., Kar Auction and AC MOORE go up and down completely randomly.

Pair Corralation between Kar Auction and AC MOORE

If you would invest  1,591  in Kar Auction Services on May 18, 2022 and sell it today you would earn a total of  107.00  from holding Kar Auction Services or generate 6.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Kar Auction Services  vs.  AC MOORE ARTS

 Performance (%) 
       Timeline  
Kar Auction Services 
Kar Auction Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Kar Auction Services are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Kar Auction reported solid returns over the last few months and may actually be approaching a breakup point.

Kar Auction Price Channel

AC MOORE ARTS 
ACMR1 Performance
0 of 100
Over the last 90 days AC MOORE ARTS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AC MOORE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kar Auction and AC MOORE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kar Auction and AC MOORE

The main advantage of trading using opposite Kar Auction and AC MOORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kar Auction position performs unexpectedly, AC MOORE 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 AC MOORE will offset losses from the drop in AC MOORE's long position.
The idea behind Kar Auction Services and AC MOORE ARTS 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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