Correlation Between HomeToGo and RELX PLC
Can any of the company-specific risk be diversified away by investing in both HomeToGo and RELX PLC 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 HomeToGo and RELX PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and RELX PLC, you can compare the effects of market volatilities on HomeToGo and RELX PLC 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 HomeToGo with a short position of RELX PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and RELX PLC.
Diversification Opportunities for HomeToGo and RELX PLC
Good diversification
The 3 months correlation between HomeToGo and RELX is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and RELX PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RELX PLC and HomeToGo 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 HomeToGo SE are associated (or correlated) with RELX PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RELX PLC has no effect on the direction of HomeToGo i.e., HomeToGo and RELX PLC go up and down completely randomly.
Pair Corralation between HomeToGo and RELX PLC
Assuming the 90 days trading horizon HomeToGo is expected to generate 1.53 times less return on investment than RELX PLC. In addition to that, HomeToGo is 2.69 times more volatile than RELX PLC. It trades about 0.09 of its total potential returns per unit of risk. RELX PLC is currently generating about 0.38 per unit of volatility. If you would invest 4,370 in RELX PLC on October 22, 2024 and sell it today you would earn a total of 322.00 from holding RELX PLC or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. RELX PLC
Performance |
| Timeline |
| HomeToGo SE |
| RELX PLC |
HomeToGo and RELX PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and RELX PLC
The main advantage of trading using opposite HomeToGo and RELX PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo position performs unexpectedly, RELX PLC 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 RELX PLC will offset losses from the drop in RELX PLC's long position.| HomeToGo vs. MOLSON RS BEVERAGE | HomeToGo vs. EBRO FOODS | HomeToGo vs. MAGNUM MINING EXP | HomeToGo vs. Cal Maine Foods |
| RELX PLC vs. bet at home AG | RELX PLC vs. FIREWEED METALS P | RELX PLC vs. HomeToGo SE | RELX PLC vs. MAGNUM MINING EXP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |