Correlation Between Card Factory and Winmark
Can any of the company-specific risk be diversified away by investing in both Card Factory and Winmark 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 Winmark 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 Winmark, you can compare the effects of market volatilities on Card Factory and Winmark 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 Winmark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Card Factory and Winmark.
Diversification Opportunities for Card Factory and Winmark
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Card and Winmark is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Card Factory plc and Winmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winmark 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 Winmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winmark has no effect on the direction of Card Factory i.e., Card Factory and Winmark go up and down completely randomly.
Pair Corralation between Card Factory and Winmark
Assuming the 90 days horizon Card Factory plc is expected to under-perform the Winmark. In addition to that, Card Factory is 1.56 times more volatile than Winmark. It trades about 0.0 of its total potential returns per unit of risk. Winmark is currently generating about 0.07 per unit of volatility. If you would invest 35,151 in Winmark on August 30, 2024 and sell it today you would earn a total of 6,085 from holding Winmark or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Card Factory plc vs. Winmark
Performance |
| Timeline |
| Card Factory plc |
| Winmark |
Card Factory and Winmark Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Card Factory and Winmark
The main advantage of trading using opposite Card Factory and Winmark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Card Factory position performs unexpectedly, Winmark 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 Winmark will offset losses from the drop in Winmark'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 |
| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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