Correlation Between Premium Catering and Copart

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

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

Diversification Opportunities for Premium Catering and Copart

0.88

Correlation Coefficient

Premium Catering  Copart

Very poor diversification

The 3 months correlation between Premium and Copart is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Premium Catering Limited and Copart Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Copart Inc and Premium Catering 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 Premium Catering Limited are associated (or correlated) with Copart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Copart Inc has no effect on the direction of Premium Catering i.e., Premium Catering and Copart go up and down completely randomly.

Pair Corralation between Premium Catering and Copart

Allowing for the 90-day total investment horizon Premium Catering Limited is expected to generate 3.03 times more return on investment than Copart. However, Premium Catering is 3.03 times more volatile than Copart Inc. It trades about -0.07 of its potential returns per unit of risk. Copart Inc is currently generating about -0.23 per unit of risk. If you would invest  878.00  in Premium Catering Limited on May 1, 2025 and sell it today you would lose (248.00) from holding Premium Catering Limited or give up 28.25% of portfolio value over 90 days.

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

Premium Catering Limited  vs.  Copart Inc

Premium Catering

Risk-Adjusted Performance

Very Weak

Over the last 90 days Premium Catering Limited 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 fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Copart Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Copart Inc 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 comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Premium Catering and Copart

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

The idea behind Premium Catering Limited and Copart 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.