Correlation Between Driven Brands and IPath Series
Can any of the company-specific risk be diversified away by investing in both Driven Brands and IPath Series 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 IPath Series 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 iPath Series B, you can compare the effects of market volatilities on Driven Brands and IPath Series 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 IPath Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Driven Brands and IPath Series.
Diversification Opportunities for Driven Brands and IPath Series
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Driven and IPath is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Driven Brands Holdings and iPath Series B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPath Series B 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 IPath Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPath Series B has no effect on the direction of Driven Brands i.e., Driven Brands and IPath Series go up and down completely randomly.
Pair Corralation between Driven Brands and IPath Series
Given the investment horizon of 90 days Driven Brands Holdings is expected to generate 1.78 times more return on investment than IPath Series. However, Driven Brands is 1.78 times more volatile than iPath Series B. It trades about -0.02 of its potential returns per unit of risk. iPath Series B is currently generating about -0.08 per unit of risk. If you would invest 2,820 in Driven Brands Holdings on August 27, 2024 and sell it today you would lose (1,151) from holding Driven Brands Holdings or give up 40.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Driven Brands Holdings vs. iPath Series B
Performance |
| Timeline |
| Driven Brands Holdings |
| iPath Series B |
Driven Brands and IPath Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Driven Brands and IPath Series
The main advantage of trading using opposite Driven Brands and IPath Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Driven Brands position performs unexpectedly, IPath Series 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 IPath Series will offset losses from the drop in IPath Series' long position.| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
| IPath Series vs. ProShares VIX Mid Term | IPath Series vs. ProShares VIX Short Term | IPath Series vs. iPath Series B | IPath Series vs. ProShares Short VIX |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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