Correlation Between Regenxbio and CarMax

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

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

Diversification Opportunities for Regenxbio and CarMax

0.64

Correlation Coefficient

Regenxbio  CarMax

Poor diversification

The 3 months correlation between Regenxbio and CarMax is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Regenxbio and CarMax Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarMax Inc and Regenxbio 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 Regenxbio are associated (or correlated) with CarMax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarMax Inc has no effect on the direction of Regenxbio i.e., Regenxbio and CarMax go up and down completely randomly.

Pair Corralation between Regenxbio and CarMax

Given the investment horizon of 90 days Regenxbio is expected to under-perform the CarMax. In addition to that, Regenxbio is 2.42 times more volatile than CarMax Inc. It trades about -0.09 of its total potential returns per unit of risk. CarMax Inc is currently generating about 0.04 per unit of volatility. If you would invest  7,227  in CarMax Inc on August 6, 2024 and sell it today you would earn a total of  79.00  from holding CarMax Inc or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Regenxbio  vs.  CarMax Inc

Regenxbio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regenxbio has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

CarMax Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CarMax Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong primary indicators, CarMax is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Regenxbio and CarMax

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

The idea behind Regenxbio and CarMax Inc 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.