Correlation Between RumbleON and Torrid Holdings
Can any of the company-specific risk be diversified away by investing in both RumbleON and Torrid Holdings 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 RumbleON and Torrid Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RumbleON and Torrid Holdings, you can compare the effects of market volatilities on RumbleON and Torrid Holdings 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 RumbleON with a short position of Torrid Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of RumbleON and Torrid Holdings.
Diversification Opportunities for RumbleON and Torrid Holdings
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RumbleON and Torrid is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding RumbleON and Torrid Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrid Holdings and RumbleON 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 RumbleON are associated (or correlated) with Torrid Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrid Holdings has no effect on the direction of RumbleON i.e., RumbleON and Torrid Holdings go up and down completely randomly.
Pair Corralation between RumbleON and Torrid Holdings
Given the investment horizon of 90 days RumbleON is expected to generate 1.72 times less return on investment than Torrid Holdings. In addition to that, RumbleON is 1.41 times more volatile than Torrid Holdings. It trades about 0.01 of its total potential returns per unit of risk. Torrid Holdings is currently generating about 0.02 per unit of volatility. If you would invest 627.00 in Torrid Holdings on November 18, 2024 and sell it today you would earn a total of 4.00 from holding Torrid Holdings or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RumbleON vs. Torrid Holdings
Performance |
| Timeline |
| RumbleON |
| Torrid Holdings |
RumbleON and Torrid Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RumbleON and Torrid Holdings
The main advantage of trading using opposite RumbleON and Torrid Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RumbleON position performs unexpectedly, Torrid Holdings 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 Torrid Holdings will offset losses from the drop in Torrid Holdings' long position.| RumbleON vs. Group 1 Automotive | RumbleON vs. Penske Automotive Group | RumbleON vs. Lithia Motors | RumbleON vs. AutoNation |
| Torrid Holdings vs. Cato Corporation | Torrid Holdings vs. Shoe Carnival | Torrid Holdings vs. Genesco | Torrid Holdings vs. Zumiez 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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