Correlation Between Spectrum Brands and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Spectrum Brands and Safety Shot 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 Spectrum Brands and Safety Shot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spectrum Brands Holdings and Safety Shot, you can compare the effects of market volatilities on Spectrum Brands and Safety Shot 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 Spectrum Brands with a short position of Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spectrum Brands and Safety Shot.
Diversification Opportunities for Spectrum Brands and Safety Shot
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Spectrum and Safety is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Spectrum Brands Holdings and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot and Spectrum Brands 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 Spectrum Brands Holdings are associated (or correlated) with Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Spectrum Brands i.e., Spectrum Brands and Safety Shot go up and down completely randomly.
Pair Corralation between Spectrum Brands and Safety Shot
Considering the 90-day investment horizon Spectrum Brands Holdings is expected to generate 0.28 times more return on investment than Safety Shot. However, Spectrum Brands Holdings is 3.6 times less risky than Safety Shot. It trades about 0.03 of its potential returns per unit of risk. Safety Shot is currently generating about -0.02 per unit of risk. If you would invest 8,029 in Spectrum Brands Holdings on November 3, 2024 and sell it today you would earn a total of 427.00 from holding Spectrum Brands Holdings or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spectrum Brands Holdings vs. Safety Shot
Performance |
| Timeline |
| Spectrum Brands Holdings |
| Safety Shot |
Spectrum Brands and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spectrum Brands and Safety Shot
The main advantage of trading using opposite Spectrum Brands and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spectrum Brands position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Spectrum Brands vs. European Wax Center | Spectrum Brands vs. Inter Parfums | Spectrum Brands vs. Mannatech Incorporated | Spectrum Brands vs. Nu Skin Enterprises |
| Safety Shot vs. ArcelorMittal SA ADR | Safety Shot vs. Robix Environmental Technologies | Safety Shot vs. Modine Manufacturing | Safety Shot vs. Lucid Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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