Correlation Between Sears Canada and Kohls Corp
Can any of the company-specific risk be diversified away by investing in both Sears Canada and Kohls Corp 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 Sears Canada and Kohls Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sears Canada and Kohls Corp, you can compare the effects of market volatilities on Sears Canada and Kohls Corp 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 Sears Canada with a short position of Kohls Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sears Canada and Kohls Corp.
Diversification Opportunities for Sears Canada and Kohls Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sears and Kohls is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sears Canada and Kohls Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohls Corp and Sears Canada 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 Sears Canada are associated (or correlated) with Kohls Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohls Corp has no effect on the direction of Sears Canada i.e., Sears Canada and Kohls Corp go up and down completely randomly.
Pair Corralation between Sears Canada and Kohls Corp
If you would invest 0.01 in Sears Canada on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Sears Canada or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Sears Canada vs. Kohls Corp
Performance |
| Timeline |
| Sears Canada |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Kohls Corp |
Sears Canada and Kohls Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sears Canada and Kohls Corp
The main advantage of trading using opposite Sears Canada and Kohls Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sears Canada position performs unexpectedly, Kohls Corp 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 Kohls Corp will offset losses from the drop in Kohls Corp's long position.The idea behind Sears Canada and Kohls Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Kohls Corp vs. Sea | Kohls Corp vs. Wayfair | Kohls Corp vs. Chewy Inc | Kohls Corp vs. Vipshop Holdings Limited |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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