Correlation Between Floor Decor and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Floor Decor and Qurate Retail 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 Qurate Retail 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 Qurate Retail Series, you can compare the effects of market volatilities on Floor Decor and Qurate Retail 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 Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Floor Decor and Qurate Retail.
Diversification Opportunities for Floor Decor and Qurate Retail
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Floor and Qurate is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Floor Decor Holdings and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series 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 Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Floor Decor i.e., Floor Decor and Qurate Retail go up and down completely randomly.
Pair Corralation between Floor Decor and Qurate Retail
Considering the 90-day investment horizon Floor Decor Holdings is expected to generate 0.58 times more return on investment than Qurate Retail. However, Floor Decor Holdings is 1.72 times less risky than Qurate Retail. It trades about 0.06 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.39 per unit of risk. If you would invest 10,381 in Floor Decor Holdings on August 24, 2024 and sell it today you would earn a total of 321.00 from holding Floor Decor Holdings or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Floor Decor Holdings vs. Qurate Retail Series
Performance |
| Timeline |
| Floor Decor Holdings |
| Qurate Retail Series |
Floor Decor and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Floor Decor and Qurate Retail
The main advantage of trading using opposite Floor Decor and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Floor Decor position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| Floor Decor vs. Live Ventures | Floor Decor vs. Haverty Furniture Companies | Floor Decor vs. Lowes Companies | Floor Decor vs. Tile Shop Holdings |
| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Hour Loop | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Liquidity Services |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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