Correlation Between Mister Car and Ethan Allen

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

By analyzing existing cross correlation between Mister Car Wash, and Ethan Allen Interiors, you can compare the effects of market volatilities on Mister Car and Ethan Allen 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 Mister Car with a short position of Ethan Allen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mister Car and Ethan Allen.

Diversification Opportunities for Mister Car and Ethan Allen

-0.4

Correlation Coefficient

Mister Car  Ethan Allen

Very good diversification

The 3 months correlation between Mister and Ethan is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mister Car Wash, and Ethan Allen Interiors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ethan Allen Interiors and Mister Car 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 Mister Car Wash, are associated (or correlated) with Ethan Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ethan Allen Interiors has no effect on the direction of Mister Car i.e., Mister Car and Ethan Allen go up and down completely randomly.

Pair Corralation between Mister Car and Ethan Allen

Considering the 90-day investment horizon Mister Car Wash, is expected to under-perform the Ethan Allen. In addition to that, Mister Car is 1.21 times more volatile than Ethan Allen Interiors. It trades about -0.17 of its total potential returns per unit of risk. Ethan Allen Interiors is currently generating about 0.14 per unit of volatility. If you would invest  2,490  in Ethan Allen Interiors on May 7, 2025 and sell it today you would earn a total of  428.00  from holding Ethan Allen Interiors or generate 17.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Mister Car Wash,  vs.  Ethan Allen Interiors

Mister Car Wash,

Risk-Adjusted Performance

Weakest

Over the last 90 days Mister Car Wash, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in September 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Ethan Allen Interiors

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Ethan Allen Interiors are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Ethan Allen exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mister Car and Ethan Allen

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

The idea behind Mister Car Wash, and Ethan Allen Interiors 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.