Correlation Between Ollies Bargain and BM European
Can any of the company-specific risk be diversified away by investing in both Ollies Bargain and BM European 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 Ollies Bargain and BM European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ollies Bargain Outlet and BM European Value, you can compare the effects of market volatilities on Ollies Bargain and BM European 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 Ollies Bargain with a short position of BM European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and BM European.
Diversification Opportunities for Ollies Bargain and BM European
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ollies and BMRPF is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet and BM European Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BM European Value and Ollies Bargain 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 Ollies Bargain Outlet are associated (or correlated) with BM European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BM European Value has no effect on the direction of Ollies Bargain i.e., Ollies Bargain and BM European go up and down completely randomly.
Pair Corralation between Ollies Bargain and BM European
Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 0.62 times more return on investment than BM European. However, Ollies Bargain Outlet is 1.61 times less risky than BM European. It trades about 0.2 of its potential returns per unit of risk. BM European Value is currently generating about -0.17 per unit of risk. If you would invest 9,090 in Ollies Bargain Outlet on August 31, 2024 and sell it today you would earn a total of 1,019 from holding Ollies Bargain Outlet or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ollies Bargain Outlet vs. BM European Value
Performance |
| Timeline |
| Ollies Bargain Outlet |
| BM European Value |
Ollies Bargain and BM European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ollies Bargain and BM European
The main advantage of trading using opposite Ollies Bargain and BM European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain position performs unexpectedly, BM European 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 BM European will offset losses from the drop in BM European's long position.| Ollies Bargain vs. Dollar Tree | Ollies Bargain vs. BJs Wholesale Club | Ollies Bargain vs. Dollar General | Ollies Bargain vs. Costco Wholesale Corp |
| BM European vs. BM European Value | BM European vs. Barratt Developments plc | BM European vs. J Sainsbury plc | BM European vs. Kingfisher plc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |