Correlation Between Credit Acceptance and Elevate Credit
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance and Elevate Credit 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 Credit Acceptance and Elevate Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and Elevate Credit, you can compare the effects of market volatilities on Credit Acceptance and Elevate Credit 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 Credit Acceptance with a short position of Elevate Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Elevate Credit.
Diversification Opportunities for Credit Acceptance and Elevate Credit
0.11 | Correlation Coefficient |
Average diversification
The 24 months correlation between Credit and Elevate is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance and Elevate Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevate Credit and Credit Acceptance 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 Credit Acceptance are associated (or correlated) with Elevate Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevate Credit has no effect on the direction of Credit Acceptance i.e., Credit Acceptance and Elevate Credit go up and down completely randomly.
Pair Corralation between Credit Acceptance and Elevate Credit
Given the investment horizon of 90 days Credit Acceptance is expected to generate 0.5 times more return on investment than Elevate Credit. However, Credit Acceptance is 2.0 times less risky than Elevate Credit. It trades about 0.02 of its potential returns per unit of risk. Elevate Credit is currently generating about -0.01 per unit of risk. If you would invest 51,267 in Credit Acceptance on January 17, 2024 and sell it today you would earn a total of 3,473 from holding Credit Acceptance or generate 6.77% return on investment over 90 days.
| Time Period | 24 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 42.63% |
| Values | Daily Returns |
Credit Acceptance vs. Elevate Credit
Performance |
| Timeline |
| Credit Acceptance |
| Elevate Credit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Credit Acceptance and Elevate Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Elevate Credit
The main advantage of trading using opposite Credit Acceptance and Elevate Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance position performs unexpectedly, Elevate Credit 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 Elevate Credit will offset losses from the drop in Elevate Credit's long position.| Credit Acceptance vs. Visa Class A | Credit Acceptance vs. PayPal Holdings | Credit Acceptance vs. Mastercard |
| Elevate Credit vs. AMCON Distributing | Elevate Credit vs. CenterPoint Energy | Elevate Credit vs. NRG Energy | Elevate Credit vs. SunOpta |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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