Correlation Between Beeks Trading and Stanley Black
Can any of the company-specific risk be diversified away by investing in both Beeks Trading and Stanley Black 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 Beeks Trading and Stanley Black into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beeks Trading and Stanley Black Decker, you can compare the effects of market volatilities on Beeks Trading and Stanley Black 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 Beeks Trading with a short position of Stanley Black. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beeks Trading and Stanley Black.
Diversification Opportunities for Beeks Trading and Stanley Black
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beeks and Stanley is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Beeks Trading and Stanley Black Decker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stanley Black Decker and Beeks Trading 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 Beeks Trading are associated (or correlated) with Stanley Black. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stanley Black Decker has no effect on the direction of Beeks Trading i.e., Beeks Trading and Stanley Black go up and down completely randomly.
Pair Corralation between Beeks Trading and Stanley Black
Assuming the 90 days trading horizon Beeks Trading is expected to under-perform the Stanley Black. In addition to that, Beeks Trading is 1.98 times more volatile than Stanley Black Decker. It trades about -0.03 of its total potential returns per unit of risk. Stanley Black Decker is currently generating about 0.34 per unit of volatility. If you would invest 8,079 in Stanley Black Decker on November 4, 2024 and sell it today you would earn a total of 849.00 from holding Stanley Black Decker or generate 10.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beeks Trading vs. Stanley Black Decker
Performance |
| Timeline |
| Beeks Trading |
| Stanley Black Decker |
Beeks Trading and Stanley Black Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beeks Trading and Stanley Black
The main advantage of trading using opposite Beeks Trading and Stanley Black positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beeks Trading position performs unexpectedly, Stanley Black 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 Stanley Black will offset losses from the drop in Stanley Black's long position.| Beeks Trading vs. Griffin Mining | Beeks Trading vs. Heavitree Brewery | Beeks Trading vs. Bankers Investment Trust | Beeks Trading vs. Liechtensteinische Landesbank AG |
| Stanley Black vs. Norwegian Air Shuttle | Stanley Black vs. Playtech Plc | Stanley Black vs. Fair Oaks Income | Stanley Black vs. Air Products Chemicals |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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