Correlation Between CarMax and MSCI ACWI
Can any of the company-specific risk be diversified away by investing in both CarMax and MSCI ACWI 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 CarMax and MSCI ACWI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarMax Inc and MSCI ACWI exAUCONSUMER, you can compare the effects of market volatilities on CarMax and MSCI ACWI 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 CarMax with a short position of MSCI ACWI. Check out your portfolio center. Please also check ongoing floating volatility patterns of CarMax and MSCI ACWI.
Diversification Opportunities for CarMax and MSCI ACWI
Pay attention - limited upside
The 3 months correlation between CarMax and MSCI is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CarMax Inc and MSCI ACWI exAUCONSUMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI ACWI exAUCONSUMER and CarMax 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 CarMax Inc are associated (or correlated) with MSCI ACWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI ACWI exAUCONSUMER has no effect on the direction of CarMax i.e., CarMax and MSCI ACWI go up and down completely randomly.
Pair Corralation between CarMax and MSCI ACWI
Considering the 90-day investment horizon CarMax Inc is expected to under-perform the MSCI ACWI. In addition to that, CarMax is 12.96 times more volatile than MSCI ACWI exAUCONSUMER. It trades about -0.02 of its total potential returns per unit of risk. MSCI ACWI exAUCONSUMER is currently generating about 0.4 per unit of volatility. If you would invest 2,487 in MSCI ACWI exAUCONSUMER on May 28, 2025 and sell it today you would earn a total of 32.00 from holding MSCI ACWI exAUCONSUMER or generate 1.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarMax Inc vs. MSCI ACWI exAUCONSUMER
Performance |
| Timeline |
| CarMax Inc |
| MSCI ACWI exAUCONSUMER |
CarMax and MSCI ACWI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CarMax and MSCI ACWI
The main advantage of trading using opposite CarMax and MSCI ACWI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CarMax position performs unexpectedly, MSCI ACWI 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 MSCI ACWI will offset losses from the drop in MSCI ACWI's long position.The idea behind CarMax Inc and MSCI ACWI exAUCONSUMER 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.| MSCI ACWI vs. Babcock Wilcox Enterprises | MSCI ACWI vs. Babcock Wilcox Enterprises, | MSCI ACWI vs. Harrow Health 8625 | MSCI ACWI vs. Oxford Lane Capital |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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