Correlation Between WINMARK and STORE ELECTRONIC
Can any of the company-specific risk be diversified away by investing in both WINMARK and STORE ELECTRONIC 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 WINMARK and STORE ELECTRONIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WINMARK and STORE ELECTRONIC, you can compare the effects of market volatilities on WINMARK and STORE ELECTRONIC 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 WINMARK with a short position of STORE ELECTRONIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WINMARK and STORE ELECTRONIC.
Diversification Opportunities for WINMARK and STORE ELECTRONIC
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WINMARK and STORE is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding WINMARK and STORE ELECTRONIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STORE ELECTRONIC and WINMARK 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 WINMARK are associated (or correlated) with STORE ELECTRONIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STORE ELECTRONIC has no effect on the direction of WINMARK i.e., WINMARK and STORE ELECTRONIC go up and down completely randomly.
Pair Corralation between WINMARK and STORE ELECTRONIC
Assuming the 90 days trading horizon WINMARK is expected to generate 1.06 times more return on investment than STORE ELECTRONIC. However, WINMARK is 1.06 times more volatile than STORE ELECTRONIC. It trades about 0.16 of its potential returns per unit of risk. STORE ELECTRONIC is currently generating about -0.08 per unit of risk. If you would invest 31,528 in WINMARK on September 12, 2024 and sell it today you would earn a total of 7,072 from holding WINMARK or generate 22.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WINMARK vs. STORE ELECTRONIC
Performance |
| Timeline |
| WINMARK |
| STORE ELECTRONIC |
WINMARK and STORE ELECTRONIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WINMARK and STORE ELECTRONIC
The main advantage of trading using opposite WINMARK and STORE ELECTRONIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WINMARK position performs unexpectedly, STORE ELECTRONIC 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 STORE ELECTRONIC will offset losses from the drop in STORE ELECTRONIC's long position.| WINMARK vs. Regions Financial | WINMARK vs. VIRG NATL BANKSH | WINMARK vs. KENEDIX OFFICE INV | WINMARK vs. CITY OFFICE REIT |
| STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple Inc | STORE ELECTRONIC vs. Apple 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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