Correlation Between DFS Furniture and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both DFS Furniture and Qurate Retail 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 DFS Furniture and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Qurate Retail Series, you can compare the effects of market volatilities on DFS Furniture and Qurate Retail 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 DFS Furniture with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Qurate Retail.
Diversification Opportunities for DFS Furniture and Qurate Retail
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DFS and Qurate is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and DFS Furniture 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 DFS Furniture PLC are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of DFS Furniture i.e., DFS Furniture and Qurate Retail go up and down completely randomly.
Pair Corralation between DFS Furniture and Qurate Retail
Assuming the 90 days trading horizon DFS Furniture PLC is expected to generate 0.36 times more return on investment than Qurate Retail. However, DFS Furniture PLC is 2.78 times less risky than Qurate Retail. It trades about 0.06 of its potential returns per unit of risk. Qurate Retail Series is currently generating about 0.01 per unit of risk. If you would invest 10,454 in DFS Furniture PLC on September 19, 2024 and sell it today you would earn a total of 3,646 from holding DFS Furniture PLC or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
DFS Furniture PLC vs. Qurate Retail Series
Performance |
| Timeline |
| DFS Furniture PLC |
| Qurate Retail Series |
DFS Furniture and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Qurate Retail
The main advantage of trading using opposite DFS Furniture and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| DFS Furniture vs. Berkshire Hathaway | DFS Furniture vs. Hyundai Motor | DFS Furniture vs. Samsung Electronics Co | DFS Furniture vs. Samsung Electronics Co |
| Qurate Retail vs. Samsung Electronics Co | Qurate Retail vs. Samsung Electronics Co | Qurate Retail vs. Hyundai Motor | Qurate Retail vs. Reliance Industries Ltd |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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