Correlation Between Deluxe and Turning Point
Can any of the company-specific risk be diversified away by investing in both Deluxe and Turning Point 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 Turning Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deluxe and Turning Point Brands, you can compare the effects of market volatilities on Deluxe and Turning Point 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 Turning Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deluxe and Turning Point.
Diversification Opportunities for Deluxe and Turning Point
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Deluxe and Turning is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Deluxe and Turning Point Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Turning Point Brands 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 Turning Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Turning Point Brands has no effect on the direction of Deluxe i.e., Deluxe and Turning Point go up and down completely randomly.
Pair Corralation between Deluxe and Turning Point
Considering the 90-day investment horizon Deluxe is expected to generate 8.63 times less return on investment than Turning Point. In addition to that, Deluxe is 1.25 times more volatile than Turning Point Brands. It trades about 0.03 of its total potential returns per unit of risk. Turning Point Brands is currently generating about 0.29 per unit of volatility. If you would invest 3,216 in Turning Point Brands on September 2, 2024 and sell it today you would earn a total of 2,974 from holding Turning Point Brands or generate 92.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deluxe vs. Turning Point Brands
Performance |
| Timeline |
| Deluxe |
| Turning Point Brands |
Deluxe and Turning Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deluxe and Turning Point
The main advantage of trading using opposite Deluxe and Turning Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deluxe position performs unexpectedly, Turning Point 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 Turning Point will offset losses from the drop in Turning Point's long position.| Deluxe vs. Criteo Sa | Deluxe vs. Emerald Expositions Events | Deluxe vs. Marchex | Deluxe vs. Integral Ad Science |
| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |