Correlation Between Retail Estates and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Qurate Retail 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 Retail Estates and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Qurate Retail Series, you can compare the effects of market volatilities on Retail Estates and Qurate Retail 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 Retail Estates with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Qurate Retail.
Diversification Opportunities for Retail Estates and Qurate Retail
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Retail and Qurate is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and Retail Estates 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 Retail Estates NV are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Retail Estates i.e., Retail Estates and Qurate Retail go up and down completely randomly.
Pair Corralation between Retail Estates and Qurate Retail
Assuming the 90 days horizon Retail Estates NV is expected to generate 0.25 times more return on investment than Qurate Retail. However, Retail Estates NV is 4.0 times less risky than Qurate Retail. It trades about 0.01 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.11 per unit of risk. If you would invest 5,673 in Retail Estates NV on August 25, 2024 and sell it today you would earn a total of 107.00 from holding Retail Estates NV or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Qurate Retail Series
Performance |
| Timeline |
| Retail Estates NV |
| Qurate Retail Series |
Retail Estates and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Qurate Retail
The main advantage of trading using opposite Retail Estates and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.| Retail Estates vs. Caseys General Stores | Retail Estates vs. Burlington Stores | Retail Estates vs. GLG LIFE TECH | Retail Estates vs. Digilife Technologies Limited |
| Qurate Retail vs. eBay Inc | Qurate Retail vs. Superior Plus Corp | Qurate Retail vs. NMI Holdings | Qurate Retail vs. Origin Agritech |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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