Correlation Between WICKES GROUP and Floor Decor
Can any of the company-specific risk be diversified away by investing in both WICKES GROUP and Floor Decor 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 WICKES GROUP and Floor Decor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WICKES GROUP PLC and Floor Decor Holdings, you can compare the effects of market volatilities on WICKES GROUP and Floor Decor 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 WICKES GROUP with a short position of Floor Decor. Check out your portfolio center. Please also check ongoing floating volatility patterns of WICKES GROUP and Floor Decor.
Diversification Opportunities for WICKES GROUP and Floor Decor
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between WICKES and Floor is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding WICKES GROUP PLC and Floor Decor Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Floor Decor Holdings and WICKES GROUP 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 WICKES GROUP PLC are associated (or correlated) with Floor Decor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Floor Decor Holdings has no effect on the direction of WICKES GROUP i.e., WICKES GROUP and Floor Decor go up and down completely randomly.
Pair Corralation between WICKES GROUP and Floor Decor
Assuming the 90 days horizon WICKES GROUP is expected to generate 1.99 times less return on investment than Floor Decor. But when comparing it to its historical volatility, WICKES GROUP PLC is 1.17 times less risky than Floor Decor. It trades about 0.03 of its potential returns per unit of risk. Floor Decor Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,703 in Floor Decor Holdings on September 13, 2024 and sell it today you would earn a total of 3,797 from holding Floor Decor Holdings or generate 56.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WICKES GROUP PLC vs. Floor Decor Holdings
Performance |
| Timeline |
| WICKES GROUP PLC |
| Floor Decor Holdings |
WICKES GROUP and Floor Decor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WICKES GROUP and Floor Decor
The main advantage of trading using opposite WICKES GROUP and Floor Decor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WICKES GROUP position performs unexpectedly, Floor Decor 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 Floor Decor will offset losses from the drop in Floor Decor's long position.| WICKES GROUP vs. The Yokohama Rubber | WICKES GROUP vs. Rayonier Advanced Materials | WICKES GROUP vs. National Storage Affiliates | WICKES GROUP vs. TELES Informationstechnologien AG |
| Floor Decor vs. The Home Depot | Floor Decor vs. The Home Depot | Floor Decor vs. LESLIES INC DL | Floor Decor vs. HORNBACH Baumarkt AG |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |