Correlation Between Blue Apron and Carvana

Can any of the company-specific risk be diversified away by investing in both Blue Apron and Carvana 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 Blue Apron and Carvana into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blue Apron Holdings and Carvana Co, you can compare the effects of market volatilities on Blue Apron and Carvana 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 Blue Apron with a short position of Carvana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Apron and Carvana.

Diversification Opportunities for Blue Apron and Carvana

0.61

Correlation Coefficient

Blue Apron  Carvana

Poor diversification

The 3 months correlation between Blue and Carvana is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Blue Apron Holdings and Carvana Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carvana and Blue Apron 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 Blue Apron Holdings are associated (or correlated) with Carvana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carvana has no effect on the direction of Blue Apron i.e., Blue Apron and Carvana go up and down completely randomly.

Pair Corralation between Blue Apron and Carvana

If you would invest  1,299  in Blue Apron Holdings on January 26, 2024 and sell it today you would earn a total of  0.00  from holding Blue Apron Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Blue Apron Holdings  vs.  Carvana Co

Blue Apron Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blue Apron Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Blue Apron is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Carvana

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Carvana Co are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Carvana sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Blue Apron and Carvana

The main advantage of trading using opposite Blue Apron and Carvana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Apron position performs unexpectedly, Carvana 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 will offset losses from the drop in Carvana's long position.

The idea behind Blue Apron Holdings and Carvana 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.