Correlation Between Floor Decor and WICKES GROUP
Can any of the company-specific risk be diversified away by investing in both Floor Decor and WICKES GROUP 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 Floor Decor and WICKES GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and WICKES GROUP PLC, you can compare the effects of market volatilities on Floor Decor and WICKES GROUP 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 Floor Decor with a short position of WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and WICKES GROUP.
Diversification Opportunities for Floor Decor and WICKES GROUP
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Floor and WICKES is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and WICKES GROUP PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WICKES GROUP PLC and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with WICKES GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WICKES GROUP PLC has no effect on the direction of Floor Decor i.e., Floor Decor and WICKES GROUP go up and down completely randomly.
Pair Corralation between Floor Decor and WICKES GROUP
Assuming the 90 days horizon Floor Decor Holdings is expected to generate 2.03 times more return on investment than WICKES GROUP. However, Floor Decor is 2.03 times more volatile than WICKES GROUP PLC. It trades about 0.21 of its potential returns per unit of risk. WICKES GROUP PLC is currently generating about 0.01 per unit of risk. If you would invest 9,350 in Floor Decor Holdings on September 12, 2024 and sell it today you would earn a total of 1,150 from holding Floor Decor Holdings or generate 12.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. WICKES GROUP PLC
Performance |
| Timeline |
| Floor Decor Holdings |
| WICKES GROUP PLC |
Floor Decor and WICKES GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and WICKES GROUP
The main advantage of trading using opposite Floor Decor and WICKES GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, WICKES GROUP 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 WICKES GROUP will offset losses from the drop in WICKES GROUP's long position.| Floor Decor vs. Highlight Communications AG | Floor Decor vs. PARKEN Sport Entertainment | Floor Decor vs. PLAYTIKA HOLDING DL 01 | Floor Decor vs. WillScot Mobile Mini |
| WICKES GROUP vs. Perseus Mining Limited | WICKES GROUP vs. Jacquet Metal Service | WICKES GROUP vs. Pebblebrook Hotel Trust | WICKES GROUP vs. Host Hotels Resorts |
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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