Correlation Between Driven Brands and Retailing Fund
Can any of the company-specific risk be diversified away by investing in both Driven Brands and Retailing Fund 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 Driven Brands and Retailing Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Driven Brands Holdings and Retailing Fund Investor, you can compare the effects of market volatilities on Driven Brands and Retailing Fund 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 Driven Brands with a short position of Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and Retailing Fund.
Diversification Opportunities for Driven Brands and Retailing Fund
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Driven and Retailing is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and Retailing Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Investor and Driven Brands 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 Driven Brands Holdings are associated (or correlated) with Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Investor has no effect on the direction of Driven Brands i.e., Driven Brands and Retailing Fund go up and down completely randomly.
Pair Corralation between Driven Brands and Retailing Fund
Given the investment horizon of 90 days Driven Brands Holdings is expected to under-perform the Retailing Fund. In addition to that, Driven Brands is 2.93 times more volatile than Retailing Fund Investor. It trades about -0.02 of its total potential returns per unit of risk. Retailing Fund Investor is currently generating about 0.05 per unit of volatility. If you would invest 4,377 in Retailing Fund Investor on October 21, 2024 and sell it today you would earn a total of 1,125 from holding Retailing Fund Investor or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driven Brands Holdings vs. Retailing Fund Investor
Performance |
| Timeline |
| Driven Brands Holdings |
| Retailing Fund Investor |
Driven Brands and Retailing Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and Retailing Fund
The main advantage of trading using opposite Driven Brands and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund's long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| Retailing Fund vs. Leisure Fund Investor | Retailing Fund vs. Banking Fund Investor | Retailing Fund vs. Technology Fund Investor | Retailing Fund vs. Financial Services Fund |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |