Correlation Between Chewy and 1StdibsCom
Can any of the company-specific risk be diversified away by investing in both Chewy and 1StdibsCom 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 Chewy and 1StdibsCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chewy Inc and 1StdibsCom, you can compare the effects of market volatilities on Chewy and 1StdibsCom 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 Chewy with a short position of 1StdibsCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chewy and 1StdibsCom.
Diversification Opportunities for Chewy and 1StdibsCom
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chewy and 1StdibsCom is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chewy Inc and 1StdibsCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1StdibsCom and Chewy 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 Chewy Inc are associated (or correlated) with 1StdibsCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1StdibsCom has no effect on the direction of Chewy i.e., Chewy and 1StdibsCom go up and down completely randomly.
Pair Corralation between Chewy and 1StdibsCom
Given the investment horizon of 90 days Chewy Inc is expected to generate 1.26 times more return on investment than 1StdibsCom. However, Chewy is 1.26 times more volatile than 1StdibsCom. It trades about 0.01 of its potential returns per unit of risk. 1StdibsCom is currently generating about 0.0 per unit of risk. If you would invest 4,055 in Chewy Inc on November 19, 2024 and sell it today you would lose (287.00) from holding Chewy Inc or give up 7.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chewy Inc vs. 1StdibsCom
Performance |
| Timeline |
| Chewy Inc |
| 1StdibsCom |
Chewy and 1StdibsCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chewy and 1StdibsCom
The main advantage of trading using opposite Chewy and 1StdibsCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chewy position performs unexpectedly, 1StdibsCom 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 1StdibsCom will offset losses from the drop in 1StdibsCom's long position.The idea behind Chewy Inc and 1StdibsCom pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 1StdibsCom vs. Hour Loop | 1StdibsCom vs. Liquidity Services | 1StdibsCom vs. Qurate Retail Series | 1StdibsCom vs. Emerge Commerce |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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