Correlation Between SunCar Technology and Lithia Motors
Can any of the company-specific risk be diversified away by investing in both SunCar Technology and Lithia Motors 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 SunCar Technology and Lithia Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunCar Technology Group and Lithia Motors, you can compare the effects of market volatilities on SunCar Technology and Lithia Motors 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 SunCar Technology with a short position of Lithia Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCar Technology and Lithia Motors.
Diversification Opportunities for SunCar Technology and Lithia Motors
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SunCar and Lithia is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SunCar Technology Group and Lithia Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lithia Motors and SunCar Technology 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 SunCar Technology Group are associated (or correlated) with Lithia Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lithia Motors has no effect on the direction of SunCar Technology i.e., SunCar Technology and Lithia Motors go up and down completely randomly.
Pair Corralation between SunCar Technology and Lithia Motors
Considering the 90-day investment horizon SunCar Technology Group is expected to generate 2.38 times more return on investment than Lithia Motors. However, SunCar Technology is 2.38 times more volatile than Lithia Motors. It trades about 0.1 of its potential returns per unit of risk. Lithia Motors is currently generating about 0.06 per unit of risk. If you would invest 730.00 in SunCar Technology Group on February 17, 2024 and sell it today you would earn a total of 72.00 from holding SunCar Technology Group or generate 9.86% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
SunCar Technology Group vs. Lithia Motors
Performance |
Timeline |
SunCar Technology |
Lithia Motors |
SunCar Technology and Lithia Motors Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SunCar Technology and Lithia Motors
The main advantage of trading using opposite SunCar Technology and Lithia Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunCar Technology position performs unexpectedly, Lithia Motors 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 Lithia Motors will offset losses from the drop in Lithia Motors' long position.SunCar Technology vs. Brp Group | SunCar Technology vs. Ultrapar Participacoes SA | SunCar Technology vs. Companhia Siderurgica Nacional | SunCar Technology vs. Dawson Geophysical |
Lithia Motors vs. Sonic Automotive | Lithia Motors vs. AutoNation | Lithia Motors vs. Asbury Automotive Group | Lithia Motors vs. Penske Automotive Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Stocks Directory Find actively traded stocks across global markets | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
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 | |
Global Correlations Find global opportunities by holding instruments from different markets |