Correlation Between Shoe Carnival and Card Factory
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival and Card Factory 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 Shoe Carnival and Card Factory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and Card Factory plc, you can compare the effects of market volatilities on Shoe Carnival and Card Factory 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 Shoe Carnival with a short position of Card Factory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and Card Factory.
Diversification Opportunities for Shoe Carnival and Card Factory
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shoe and Card is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and Card Factory plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Card Factory plc and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with Card Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Card Factory plc has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and Card Factory go up and down completely randomly.
Pair Corralation between Shoe Carnival and Card Factory
Given the investment horizon of 90 days Shoe Carnival is expected to generate 0.45 times more return on investment than Card Factory. However, Shoe Carnival is 2.2 times less risky than Card Factory. It trades about -0.04 of its potential returns per unit of risk. Card Factory plc is currently generating about -0.2 per unit of risk. If you would invest 3,583 in Shoe Carnival on August 28, 2024 and sell it today you would lose (89.00) from holding Shoe Carnival or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shoe Carnival vs. Card Factory plc
Performance |
| Timeline |
| Shoe Carnival |
| Card Factory plc |
Shoe Carnival and Card Factory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and Card Factory
The main advantage of trading using opposite Shoe Carnival and Card Factory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival position performs unexpectedly, Card Factory 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 Card Factory will offset losses from the drop in Card Factory's long position.| Shoe Carnival vs. Citi Trends | Shoe Carnival vs. Zumiez Inc | Shoe Carnival vs. Buckle Inc | Shoe Carnival vs. Cato Corporation |
| Card Factory vs. Dixons Carphone plc | Card Factory vs. Ceconomy AG ADR | Card Factory vs. Tandy Leather Factory | Card Factory vs. Green River Gold |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |