Correlation Between Deluxe and Savers Value
Can any of the company-specific risk be diversified away by investing in both Deluxe and Savers Value 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 Deluxe and Savers Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Savers Value Village,, you can compare the effects of market volatilities on Deluxe and Savers Value 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 Deluxe with a short position of Savers Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Savers Value.
Diversification Opportunities for Deluxe and Savers Value
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deluxe and Savers is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Savers Value Village, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Savers Value Village, and Deluxe 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 Deluxe are associated (or correlated) with Savers Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Savers Value Village, has no effect on the direction of Deluxe i.e., Deluxe and Savers Value go up and down completely randomly.
Pair Corralation between Deluxe and Savers Value
Considering the 90-day investment horizon Deluxe is expected to under-perform the Savers Value. But the stock apears to be less risky and, when comparing its historical volatility, Deluxe is 2.14 times less risky than Savers Value. The stock trades about -0.04 of its potential returns per unit of risk. The Savers Value Village, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Savers Value Village, on October 25, 2024 and sell it today you would earn a total of 101.00 from holding Savers Value Village, or generate 9.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Savers Value Village,
Performance |
| Timeline |
| Deluxe |
| Savers Value Village, |
Deluxe and Savers Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Savers Value
The main advantage of trading using opposite Deluxe and Savers Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe position performs unexpectedly, Savers Value 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 Savers Value will offset losses from the drop in Savers Value's long position.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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