Correlation Between Solo Brands and ATRenew
Can any of the company-specific risk be diversified away by investing in both Solo Brands and ATRenew 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 Solo Brands and ATRenew into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Solo Brands and ATRenew Inc DRC, you can compare the effects of market volatilities on Solo Brands and ATRenew 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 Solo Brands with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solo Brands and ATRenew.
Diversification Opportunities for Solo Brands and ATRenew
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Solo and ATRenew is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Solo Brands and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Solo 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 Solo Brands are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Solo Brands i.e., Solo Brands and ATRenew go up and down completely randomly.
Pair Corralation between Solo Brands and ATRenew
Considering the 90-day investment horizon Solo Brands is expected to under-perform the ATRenew. But the stock apears to be less risky and, when comparing its historical volatility, Solo Brands is 1.01 times less risky than ATRenew. The stock trades about -0.09 of its potential returns per unit of risk. The ATRenew Inc DRC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 228.00 in ATRenew Inc DRC on August 23, 2024 and sell it today you would earn a total of 52.00 from holding ATRenew Inc DRC or generate 22.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Solo Brands vs. ATRenew Inc DRC
Performance |
| Timeline |
| Solo Brands |
| ATRenew Inc DRC |
Solo Brands and ATRenew Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Solo Brands and ATRenew
The main advantage of trading using opposite Solo Brands and ATRenew positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Solo Brands position performs unexpectedly, ATRenew 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 ATRenew will offset losses from the drop in ATRenew's long position.| Solo Brands vs. Vista Outdoor | Solo Brands vs. Six Flags Entertainment | Solo Brands vs. Canlan Ice Sports | Solo Brands vs. OneSpaWorld Holdings |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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