Correlation Between Fossil and Sturm Ruger
Can any of the company-specific risk be diversified away by investing in both Fossil and Sturm Ruger 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 Fossil and Sturm Ruger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fossil Group and Sturm Ruger, you can compare the effects of market volatilities on Fossil and Sturm Ruger 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 Fossil with a short position of Sturm Ruger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Sturm Ruger.
Diversification Opportunities for Fossil and Sturm Ruger
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fossil and Sturm is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group and Sturm Ruger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sturm Ruger and Fossil 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 Fossil Group are associated (or correlated) with Sturm Ruger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sturm Ruger has no effect on the direction of Fossil i.e., Fossil and Sturm Ruger go up and down completely randomly.
Pair Corralation between Fossil and Sturm Ruger
Given the investment horizon of 90 days Fossil Group is expected to generate 3.28 times more return on investment than Sturm Ruger. However, Fossil is 3.28 times more volatile than Sturm Ruger. It trades about -0.01 of its potential returns per unit of risk. Sturm Ruger is currently generating about -0.06 per unit of risk. If you would invest 138.00 in Fossil Group on August 24, 2024 and sell it today you would lose (23.00) from holding Fossil Group or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fossil Group vs. Sturm Ruger
Performance |
| Timeline |
| Fossil Group |
| Sturm Ruger |
Fossil and Sturm Ruger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fossil and Sturm Ruger
The main advantage of trading using opposite Fossil and Sturm Ruger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fossil position performs unexpectedly, Sturm Ruger 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 Sturm Ruger will offset losses from the drop in Sturm Ruger's long position.| Fossil vs. Lanvin Group Holdings | Fossil vs. Signet Jewelers | Fossil vs. Tapestry | Fossil vs. Capri Holdings |
| Sturm Ruger vs. Ammo Inc | Sturm Ruger vs. Kratos Defense Security | Sturm Ruger vs. VSE Corporation | Sturm Ruger vs. Ammo Preferred |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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