Correlation Between Carters and Turtle Beach
Can any of the company-specific risk be diversified away by investing in both Carters and Turtle Beach 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 Carters and Turtle Beach into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carters and Turtle Beach Corp, you can compare the effects of market volatilities on Carters and Turtle Beach 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 Carters with a short position of Turtle Beach. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carters and Turtle Beach.
Diversification Opportunities for Carters and Turtle Beach
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Carters and Turtle is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Carters and Turtle Beach Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turtle Beach Corp and Carters 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 Carters are associated (or correlated) with Turtle Beach. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turtle Beach Corp has no effect on the direction of Carters i.e., Carters and Turtle Beach go up and down completely randomly.
Pair Corralation between Carters and Turtle Beach
Considering the 90-day investment horizon Carters is expected to under-perform the Turtle Beach. But the stock apears to be less risky and, when comparing its historical volatility, Carters is 1.82 times less risky than Turtle Beach. The stock trades about -0.01 of its potential returns per unit of risk. The Turtle Beach Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 861.00 in Turtle Beach Corp on August 28, 2024 and sell it today you would earn a total of 836.00 from holding Turtle Beach Corp or generate 97.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carters vs. Turtle Beach Corp
Performance |
| Timeline |
| Carters |
| Turtle Beach Corp |
Carters and Turtle Beach Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carters and Turtle Beach
The main advantage of trading using opposite Carters and Turtle Beach positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carters position performs unexpectedly, Turtle Beach 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 Turtle Beach will offset losses from the drop in Turtle Beach's long position.| Carters vs. VF Corporation | Carters vs. Levi Strauss Co | Carters vs. Under Armour A | Carters vs. Oxford Industries |
| Turtle Beach vs. VOXX International | Turtle Beach vs. LG Display Co | Turtle Beach vs. Vizio Holding Corp | Turtle Beach vs. Emerson Radio |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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