Correlation Between Container Store and ODP Corp
Can any of the company-specific risk be diversified away by investing in both Container Store and ODP 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 Container Store and ODP Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Container Store Group and ODP Corp, you can compare the effects of market volatilities on Container Store and ODP 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 Container Store with a short position of ODP Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Container Store and ODP Corp.
Diversification Opportunities for Container Store and ODP Corp
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Container and ODP is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Container Store Group and ODP Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ODP Corp and Container Store 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 Container Store Group are associated (or correlated) with ODP Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ODP Corp has no effect on the direction of Container Store i.e., Container Store and ODP Corp go up and down completely randomly.
Pair Corralation between Container Store and ODP Corp
Considering the 90-day investment horizon Container Store Group is expected to under-perform the ODP Corp. In addition to that, Container Store is 3.01 times more volatile than ODP Corp. It trades about -0.04 of its total potential returns per unit of risk. ODP Corp is currently generating about -0.03 per unit of volatility. If you would invest 4,981 in ODP Corp on August 28, 2024 and sell it today you would lose (2,287) from holding ODP Corp or give up 45.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Container Store Group vs. ODP Corp
Performance |
| Timeline |
| Container Store Group |
| ODP Corp |
Container Store and ODP Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Container Store and ODP Corp
The main advantage of trading using opposite Container Store and ODP Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Container Store position performs unexpectedly, ODP 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 ODP Corp will offset losses from the drop in ODP Corp's long position.| Container Store vs. Tillys Inc | Container Store vs. Big 5 Sporting | Container Store vs. Sportsmans | Container Store vs. Noodles Company |
| ODP Corp vs. Oriental Culture Holding | ODP Corp vs. Hour Loop | ODP Corp vs. Qurate Retail Series | ODP Corp vs. Emerge Commerce |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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