Correlation Between Sezzle Common and BBB Foods
Can any of the company-specific risk be diversified away by investing in both Sezzle Common and BBB Foods 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 Sezzle Common and BBB Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sezzle Common Stock and BBB Foods, you can compare the effects of market volatilities on Sezzle Common and BBB Foods 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 Sezzle Common with a short position of BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sezzle Common and BBB Foods.
Diversification Opportunities for Sezzle Common and BBB Foods
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sezzle and BBB is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Sezzle Common Stock and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods and Sezzle Common 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 Sezzle Common Stock are associated (or correlated) with BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Sezzle Common i.e., Sezzle Common and BBB Foods go up and down completely randomly.
Pair Corralation between Sezzle Common and BBB Foods
Given the investment horizon of 90 days Sezzle Common Stock is expected to generate 10.22 times more return on investment than BBB Foods. However, Sezzle Common is 10.22 times more volatile than BBB Foods. It trades about 0.27 of its potential returns per unit of risk. BBB Foods is currently generating about 0.0 per unit of risk. If you would invest 22,092 in Sezzle Common Stock on August 28, 2024 and sell it today you would earn a total of 24,308 from holding Sezzle Common Stock or generate 110.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sezzle Common Stock vs. BBB Foods
Performance |
| Timeline |
| Sezzle Common Stock |
| BBB Foods |
Sezzle Common and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sezzle Common and BBB Foods
The main advantage of trading using opposite Sezzle Common and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sezzle Common position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' long position.| Sezzle Common vs. BBB Foods | Sezzle Common vs. Mativ Holdings | Sezzle Common vs. Meiwu Technology Co | Sezzle Common vs. Pool Corporation |
| BBB Foods vs. Innovative Food Hldg | BBB Foods vs. Calavo Growers | BBB Foods vs. The Chefs Warehouse | BBB Foods vs. AMCON Distributing |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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