Correlation Between Kaixin Auto and Advance Auto
Can any of the company-specific risk be diversified away by investing in both Kaixin Auto and Advance Auto 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 Kaixin Auto and Advance Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaixin Auto Holdings and Advance Auto Parts, you can compare the effects of market volatilities on Kaixin Auto and Advance Auto 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 Kaixin Auto with a short position of Advance Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaixin Auto and Advance Auto.
Diversification Opportunities for Kaixin Auto and Advance Auto
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaixin and Advance is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kaixin Auto Holdings and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts and Kaixin Auto 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 Kaixin Auto Holdings are associated (or correlated) with Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of Kaixin Auto i.e., Kaixin Auto and Advance Auto go up and down completely randomly.
Pair Corralation between Kaixin Auto and Advance Auto
Given the investment horizon of 90 days Kaixin Auto Holdings is expected to under-perform the Advance Auto. In addition to that, Kaixin Auto is 5.83 times more volatile than Advance Auto Parts. It trades about -0.27 of its total potential returns per unit of risk. Advance Auto Parts is currently generating about -0.05 per unit of volatility. If you would invest 5,513 in Advance Auto Parts on August 30, 2025 and sell it today you would lose (279.00) from holding Advance Auto Parts or give up 5.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaixin Auto Holdings vs. Advance Auto Parts
Performance |
| Timeline |
| Kaixin Auto Holdings |
| Advance Auto Parts |
Kaixin Auto and Advance Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaixin Auto and Advance Auto
The main advantage of trading using opposite Kaixin Auto and Advance Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaixin Auto position performs unexpectedly, Advance Auto 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 Advance Auto will offset losses from the drop in Advance Auto's long position.| Kaixin Auto vs. LATAM Airlines Group | Kaixin Auto vs. Goodyear Tire Rubber | Kaixin Auto vs. Rayonier Advanced Materials | Kaixin Auto vs. Southwest Airlines |
| Advance Auto vs. Ubisoft Entertainment | Advance Auto vs. Dave Busters Entertainment | Advance Auto vs. ZhongAn Online P | Advance Auto vs. Global Net Lease |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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