Correlation Between Target and Bath Body
Can any of the company-specific risk be diversified away by investing in both Target and Bath Body 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 Target and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Bath Body Works, you can compare the effects of market volatilities on Target and Bath Body 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 Target with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Bath Body.
Diversification Opportunities for Target and Bath Body
Very good diversification
The 3 months correlation between Target and Bath is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Target and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and Target 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 Target are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Target i.e., Target and Bath Body go up and down completely randomly.
Pair Corralation between Target and Bath Body
Considering the 90-day investment horizon Target is expected to generate 0.86 times more return on investment than Bath Body. However, Target is 1.17 times less risky than Bath Body. It trades about 0.02 of its potential returns per unit of risk. Bath Body Works is currently generating about 0.01 per unit of risk. If you would invest 12,054 in Target on September 4, 2024 and sell it today you would earn a total of 1,018 from holding Target or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Bath Body Works
Performance |
| Timeline |
| Target |
| Bath Body Works |
Target and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Bath Body
The main advantage of trading using opposite Target and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Target vs. Aquagold International | Target vs. Thrivent High Yield | Target vs. Morningstar Unconstrained Allocation | Target vs. Via Renewables |
| Bath Body vs. Sportsmans | Bath Body vs. Big 5 Sporting | Bath Body vs. Williams Sonoma | Bath Body vs. Dicks Sporting Goods |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |