Correlation Between Ollies Bargain and Wal Mart
Can any of the company-specific risk be diversified away by investing in both Ollies Bargain and Wal Mart 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 Wal Mart 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 Wal Mart de, you can compare the effects of market volatilities on Ollies Bargain and Wal Mart 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 Wal Mart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and Wal Mart.
Diversification Opportunities for Ollies Bargain and Wal Mart
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ollies and Wal is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet and Wal Mart de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wal Mart de 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 Wal Mart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wal Mart de has no effect on the direction of Ollies Bargain i.e., Ollies Bargain and Wal Mart go up and down completely randomly.
Pair Corralation between Ollies Bargain and Wal Mart
Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 0.85 times more return on investment than Wal Mart. However, Ollies Bargain Outlet is 1.17 times less risky than Wal Mart. It trades about 0.2 of its potential returns per unit of risk. Wal Mart de is currently generating about -0.11 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. Wal Mart de
Performance |
| Timeline |
| Ollies Bargain Outlet |
| Wal Mart de |
Ollies Bargain and Wal Mart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ollies Bargain and Wal Mart
The main advantage of trading using opposite Ollies Bargain and Wal Mart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain position performs unexpectedly, Wal Mart 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 Wal Mart will offset losses from the drop in Wal Mart'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 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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