Correlation Between BRIT AMER and OFFICE DEPOT
Can any of the company-specific risk be diversified away by investing in both BRIT AMER and OFFICE DEPOT 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 BRIT AMER and OFFICE DEPOT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRIT AMER TOBACCO and OFFICE DEPOT, you can compare the effects of market volatilities on BRIT AMER and OFFICE DEPOT 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 BRIT AMER with a short position of OFFICE DEPOT. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRIT AMER and OFFICE DEPOT.
Diversification Opportunities for BRIT AMER and OFFICE DEPOT
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BRIT and OFFICE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BRIT AMER TOBACCO and OFFICE DEPOT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFFICE DEPOT and BRIT AMER 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 BRIT AMER TOBACCO are associated (or correlated) with OFFICE DEPOT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFFICE DEPOT has no effect on the direction of BRIT AMER i.e., BRIT AMER and OFFICE DEPOT go up and down completely randomly.
Pair Corralation between BRIT AMER and OFFICE DEPOT
If you would invest 3,239 in BRIT AMER TOBACCO on August 28, 2024 and sell it today you would earn a total of 343.00 from holding BRIT AMER TOBACCO or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
BRIT AMER TOBACCO vs. OFFICE DEPOT
Performance |
| Timeline |
| BRIT AMER TOBACCO |
| OFFICE DEPOT |
BRIT AMER and OFFICE DEPOT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRIT AMER and OFFICE DEPOT
The main advantage of trading using opposite BRIT AMER and OFFICE DEPOT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRIT AMER position performs unexpectedly, OFFICE DEPOT 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 OFFICE DEPOT will offset losses from the drop in OFFICE DEPOT's long position.| BRIT AMER vs. USWE SPORTS AB | BRIT AMER vs. Selective Insurance Group | BRIT AMER vs. United Insurance Holdings | BRIT AMER vs. ANTA SPORTS PRODUCT |
| OFFICE DEPOT vs. Taylor Morrison Home | OFFICE DEPOT vs. Air New Zealand | OFFICE DEPOT vs. Corsair Gaming | OFFICE DEPOT vs. MI Homes |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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