Correlation Between Auto Trader and EverQuote
Can any of the company-specific risk be diversified away by investing in both Auto Trader and EverQuote 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 Auto Trader and EverQuote into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auto Trader Group and EverQuote Class A, you can compare the effects of market volatilities on Auto Trader and EverQuote 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 Auto Trader with a short position of EverQuote. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auto Trader and EverQuote.
Diversification Opportunities for Auto Trader and EverQuote
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Auto and EverQuote is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Auto Trader Group and EverQuote Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EverQuote Class A and Auto Trader 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 Auto Trader Group are associated (or correlated) with EverQuote. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EverQuote Class A has no effect on the direction of Auto Trader i.e., Auto Trader and EverQuote go up and down completely randomly.
Pair Corralation between Auto Trader and EverQuote
Assuming the 90 days trading horizon Auto Trader Group is expected to under-perform the EverQuote. But the stock apears to be less risky and, when comparing its historical volatility, Auto Trader Group is 1.75 times less risky than EverQuote. The stock trades about -0.19 of its potential returns per unit of risk. The EverQuote Class A is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,293 in EverQuote Class A on August 20, 2025 and sell it today you would earn a total of 161.00 from holding EverQuote Class A or generate 7.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auto Trader Group vs. EverQuote Class A
Performance |
| Timeline |
| Auto Trader Group |
| EverQuote Class A |
Auto Trader and EverQuote Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auto Trader and EverQuote
The main advantage of trading using opposite Auto Trader and EverQuote positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auto Trader position performs unexpectedly, EverQuote 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 EverQuote will offset losses from the drop in EverQuote's long position.| Auto Trader vs. Polar Capital Technology | Auto Trader vs. Auction Technology Group | Auto Trader vs. Trainline Plc | Auto Trader vs. Lindsell Train Investment |
| EverQuote vs. Shutterstock | EverQuote vs. Getty Images Holdings | EverQuote vs. Autohome | EverQuote vs. Fiverr International |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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