Correlation Between TOPPS TILES and WICKES GROUP
Can any of the company-specific risk be diversified away by investing in both TOPPS TILES 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 TOPPS TILES and WICKES GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPPS TILES PLC and WICKES GROUP PLC, you can compare the effects of market volatilities on TOPPS TILES 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 TOPPS TILES with a short position of WICKES GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPPS TILES and WICKES GROUP.
Diversification Opportunities for TOPPS TILES and WICKES GROUP
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TOPPS and WICKES is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding TOPPS TILES PLC 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 TOPPS TILES 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 TOPPS TILES PLC 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 TOPPS TILES i.e., TOPPS TILES and WICKES GROUP go up and down completely randomly.
Pair Corralation between TOPPS TILES and WICKES GROUP
Assuming the 90 days horizon TOPPS TILES PLC is expected to under-perform the WICKES GROUP. In addition to that, TOPPS TILES is 1.51 times more volatile than WICKES GROUP PLC. It trades about -0.22 of its total potential returns per unit of risk. WICKES GROUP PLC is currently generating about -0.31 per unit of volatility. If you would invest 187.00 in WICKES GROUP PLC on September 3, 2024 and sell it today you would lose (14.00) from holding WICKES GROUP PLC or give up 7.49% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPPS TILES PLC vs. WICKES GROUP PLC
Performance |
| Timeline |
| TOPPS TILES PLC |
| WICKES GROUP PLC |
TOPPS TILES and WICKES GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPPS TILES and WICKES GROUP
The main advantage of trading using opposite TOPPS TILES and WICKES GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPPS TILES 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.| TOPPS TILES vs. X FAB Silicon Foundries | TOPPS TILES vs. X FAB Silicon Foundries | TOPPS TILES vs. SEKISUI CHEMICAL | TOPPS TILES vs. Selective Insurance Group |
| WICKES GROUP vs. ScanSource | WICKES GROUP vs. FARO Technologies | WICKES GROUP vs. IMPERIAL TOBACCO | WICKES GROUP vs. PKSHA TECHNOLOGY INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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