Correlation Between Qurate Retail and Target Corp

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Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Target Corp 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 Qurate Retail and Target Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Target Corp, you can compare the effects of market volatilities on Qurate Retail and Target Corp 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 Qurate Retail with a short position of Target Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Target Corp.

Diversification Opportunities for Qurate Retail and Target Corp

QurateTargetDiversified AwayQurateTargetDiversified Away100%
-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between Qurate and Target is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Target Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Corp and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Target Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Corp has no effect on the direction of Qurate Retail i.e., Qurate Retail and Target Corp go up and down completely randomly.

Pair Corralation between Qurate Retail and Target Corp

Assuming the 90 days trading horizon Qurate Retail Series is expected to generate 2.59 times more return on investment than Target Corp. However, Qurate Retail is 2.59 times more volatile than Target Corp. It trades about 0.07 of its potential returns per unit of risk. Target Corp is currently generating about -0.04 per unit of risk. If you would invest  33.00  in Qurate Retail Series on November 23, 2024 and sell it today you would earn a total of  2.00  from holding Qurate Retail Series or generate 6.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy67.44%
ValuesDaily Returns

Qurate Retail Series  vs.  Target Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-100102030
JavaScript chart by amCharts 3.21.150A4G 0LD8
       Timeline  
Qurate Retail Series 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Qurate Retail Series has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Target Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Target Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Target Corp is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb125130135140

Qurate Retail and Target Corp Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.73-5.04-3.35-1.66-0.02591.533.084.646.19 0.0250.0300.0350.040
JavaScript chart by amCharts 3.21.150A4G 0LD8
       Returns  

Pair Trading with Qurate Retail and Target Corp

The main advantage of trading using opposite Qurate Retail and Target Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Target Corp 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 Target Corp will offset losses from the drop in Target Corp's long position.
The idea behind Qurate Retail Series and Target Corp 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

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