Correlation Between Foot Locker and Chijet
Can any of the company-specific risk be diversified away by investing in both Foot Locker and Chijet 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 Foot Locker and Chijet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foot Locker and Chijet Motor Company,, you can compare the effects of market volatilities on Foot Locker and Chijet 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 Foot Locker with a short position of Chijet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foot Locker and Chijet.
Diversification Opportunities for Foot Locker and Chijet
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Foot and Chijet is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Foot Locker and Chijet Motor Company, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chijet Motor , and Foot Locker 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 Foot Locker are associated (or correlated) with Chijet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chijet Motor , has no effect on the direction of Foot Locker i.e., Foot Locker and Chijet go up and down completely randomly.
Pair Corralation between Foot Locker and Chijet
Allowing for the 90-day total investment horizon Foot Locker is expected to under-perform the Chijet. But the stock apears to be less risky and, when comparing its historical volatility, Foot Locker is 2.66 times less risky than Chijet. The stock trades about -0.4 of its potential returns per unit of risk. The Chijet Motor Company, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 118.00 in Chijet Motor Company, on January 8, 2025 and sell it today you would earn a total of 73.00 from holding Chijet Motor Company, or generate 61.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foot Locker vs. Chijet Motor Company,
Performance |
| Timeline |
| Foot Locker |
| Chijet Motor , |
Foot Locker and Chijet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foot Locker and Chijet
The main advantage of trading using opposite Foot Locker and Chijet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foot Locker position performs unexpectedly, Chijet 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 Chijet will offset losses from the drop in Chijet's long position.| Foot Locker vs. Abercrombie Fitch | Foot Locker vs. Urban Outfitters | Foot Locker vs. Childrens Place | Foot Locker vs. American Eagle Outfitters |
| Chijet vs. Comstock Holding Companies | Chijet vs. NorthWestern | Chijet vs. Apartment Investment and | Chijet vs. Willamette Valley Vineyards |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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