Correlation Between Cboe UK and Bath Body
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By analyzing existing cross correlation between Cboe UK Consumer and Bath Body Works, you can compare the effects of market volatilities on Cboe UK and Bath Body 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 Cboe UK with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and Bath Body.
Diversification Opportunities for Cboe UK and Bath Body
Very poor diversification
The 3 months correlation between Cboe and Bath is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and Cboe UK 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 Cboe UK Consumer are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Cboe UK i.e., Cboe UK and Bath Body go up and down completely randomly.
Pair Corralation between Cboe UK and Bath Body
Assuming the 90 days trading horizon Cboe UK Consumer is expected to under-perform the Bath Body. But the index apears to be less risky and, when comparing its historical volatility, Cboe UK Consumer is 3.32 times less risky than Bath Body. The index trades about -0.04 of its potential returns per unit of risk. The Bath Body Works is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,590 in Bath Body Works on September 24, 2024 and sell it today you would earn a total of 352.00 from holding Bath Body Works or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cboe UK Consumer vs. Bath Body Works
Performance |
| Timeline |
Cboe UK and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
Bath Body Works
Pair trading matchups for Bath Body
Pair Trading with Cboe UK and Bath Body
The main advantage of trading using opposite Cboe UK and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Cboe UK vs. AMG Advanced Metallurgical | Cboe UK vs. Bloomsbury Publishing Plc | Cboe UK vs. CleanTech Lithium plc | Cboe UK vs. Fulcrum Metals PLC |
| Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body vs. Triad Group PLC |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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