Correlation Between Dorman Products and World Acceptance
Can any of the company-specific risk be diversified away by investing in both Dorman Products and World Acceptance 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 Dorman Products and World Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dorman Products and World Acceptance, you can compare the effects of market volatilities on Dorman Products and World Acceptance 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 Dorman Products with a short position of World Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dorman Products and World Acceptance.
Diversification Opportunities for Dorman Products and World Acceptance
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dorman and World is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Dorman Products and World Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Acceptance and Dorman Products 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 Dorman Products are associated (or correlated) with World Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Acceptance has no effect on the direction of Dorman Products i.e., Dorman Products and World Acceptance go up and down completely randomly.
Pair Corralation between Dorman Products and World Acceptance
Given the investment horizon of 90 days Dorman Products is expected to generate 0.97 times more return on investment than World Acceptance. However, Dorman Products is 1.03 times less risky than World Acceptance. It trades about 0.19 of its potential returns per unit of risk. World Acceptance is currently generating about 0.09 per unit of risk. If you would invest 12,761 in Dorman Products on June 7, 2025 and sell it today you would earn a total of 3,492 from holding Dorman Products or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dorman Products vs. World Acceptance
Performance |
| Timeline |
| Dorman Products |
| World Acceptance |
Dorman Products and World Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dorman Products and World Acceptance
The main advantage of trading using opposite Dorman Products and World Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dorman Products position performs unexpectedly, World Acceptance 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 World Acceptance will offset losses from the drop in World Acceptance's long position.| Dorman Products vs. Monro Muffler Brake | Dorman Products vs. Motorcar Parts of | Dorman Products vs. Douglas Dynamics | Dorman Products vs. Standard Motor Products |
| World Acceptance vs. FirstCash | World Acceptance vs. Enova International | World Acceptance vs. Green Dot | World Acceptance vs. Medallion Financial Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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