Correlation Between Floor Decor and Capstone Technologies
Can any of the company-specific risk be diversified away by investing in both Floor Decor and Capstone Technologies 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 Floor Decor and Capstone Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Floor Decor Holdings and Capstone Technologies Group, you can compare the effects of market volatilities on Floor Decor and Capstone Technologies 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 Floor Decor with a short position of Capstone Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Capstone Technologies.
Diversification Opportunities for Floor Decor and Capstone Technologies
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Floor and Capstone is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Capstone Technologies Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Technologies and Floor Decor 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 Floor Decor Holdings are associated (or correlated) with Capstone Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Technologies has no effect on the direction of Floor Decor i.e., Floor Decor and Capstone Technologies go up and down completely randomly.
Pair Corralation between Floor Decor and Capstone Technologies
Considering the 90-day investment horizon Floor Decor Holdings is expected to generate 4.22 times more return on investment than Capstone Technologies. However, Floor Decor is 4.22 times more volatile than Capstone Technologies Group. It trades about 0.15 of its potential returns per unit of risk. Capstone Technologies Group is currently generating about 0.22 per unit of risk. If you would invest 10,426 in Floor Decor Holdings on September 12, 2024 and sell it today you would earn a total of 870.00 from holding Floor Decor Holdings or generate 8.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Floor Decor Holdings vs. Capstone Technologies Group
Performance |
| Timeline |
| Floor Decor Holdings |
| Capstone Technologies |
Floor Decor and Capstone Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and Capstone Technologies
The main advantage of trading using opposite Floor Decor and Capstone Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, Capstone Technologies 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 Capstone Technologies will offset losses from the drop in Capstone Technologies' long position.| Floor Decor vs. Victory Integrity Smallmid Cap | Floor Decor vs. Hilton Worldwide Holdings | Floor Decor vs. NVIDIA | Floor Decor vs. JPMorgan Chase Co |
| Capstone Technologies vs. Arhaus Inc | Capstone Technologies vs. Floor Decor Holdings | Capstone Technologies vs. Live Ventures | Capstone Technologies vs. ATT Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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