Correlation Between Card Factory and Ulta Beauty
Can any of the company-specific risk be diversified away by investing in both Card Factory and Ulta Beauty 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 Card Factory and Ulta Beauty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Card Factory plc and Ulta Beauty, you can compare the effects of market volatilities on Card Factory and Ulta Beauty 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 Card Factory with a short position of Ulta Beauty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Card Factory and Ulta Beauty.
Diversification Opportunities for Card Factory and Ulta Beauty
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Card and Ulta is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Card Factory plc and Ulta Beauty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ulta Beauty and Card Factory 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 Card Factory plc are associated (or correlated) with Ulta Beauty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ulta Beauty has no effect on the direction of Card Factory i.e., Card Factory and Ulta Beauty go up and down completely randomly.
Pair Corralation between Card Factory and Ulta Beauty
If you would invest 37,765 in Ulta Beauty on September 2, 2024 and sell it today you would earn a total of 899.00 from holding Ulta Beauty or generate 2.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Card Factory plc vs. Ulta Beauty
Performance |
| Timeline |
| Card Factory plc |
| Ulta Beauty |
Card Factory and Ulta Beauty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Card Factory and Ulta Beauty
The main advantage of trading using opposite Card Factory and Ulta Beauty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Card Factory position performs unexpectedly, Ulta Beauty 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 Ulta Beauty will offset losses from the drop in Ulta Beauty's long position.| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
| Ulta Beauty vs. Williams Sonoma | Ulta Beauty vs. Dicks Sporting Goods | Ulta Beauty vs. Best Buy Co | Ulta Beauty vs. AutoZone |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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