Correlation Between AutoZone and CSS Industries

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

Diversification Opportunities for AutoZone and CSS Industries

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between AutoZone and CSS Industries

If you would invest  295,499  in AutoZone on December 29, 2023 and sell it today you would earn a total of  19,666  from holding AutoZone or generate 6.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

AutoZone  vs.  CSS Industries

 Performance 
       Timeline  
AutoZone 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in AutoZone are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, AutoZone displayed solid returns over the last few months and may actually be approaching a breakup point.
CSS Industries 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days CSS Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CSS Industries is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

AutoZone and CSS Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AutoZone and CSS Industries

The main advantage of trading using opposite AutoZone and CSS Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoZone position performs unexpectedly, CSS Industries 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 CSS Industries will offset losses from the drop in CSS Industries' long position.
The idea behind AutoZone and CSS Industries 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 the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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