Correlation Between Target and Barnes Noble
Can any of the company-specific risk be diversified away by investing in both Target and Barnes Noble 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 Barnes Noble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target and Barnes Noble Education, you can compare the effects of market volatilities on Target and Barnes Noble 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 Barnes Noble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target and Barnes Noble.
Diversification Opportunities for Target and Barnes Noble
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Target and Barnes is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Target and Barnes Noble Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barnes Noble Education 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 Barnes Noble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barnes Noble Education has no effect on the direction of Target i.e., Target and Barnes Noble go up and down completely randomly.
Pair Corralation between Target and Barnes Noble
Considering the 90-day investment horizon Target is expected to under-perform the Barnes Noble. In addition to that, Target is 1.22 times more volatile than Barnes Noble Education. It trades about -0.08 of its total potential returns per unit of risk. Barnes Noble Education is currently generating about 0.08 per unit of volatility. If you would invest 1,117 in Barnes Noble Education on September 12, 2024 and sell it today you would earn a total of 67.00 from holding Barnes Noble Education or generate 6.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Target vs. Barnes Noble Education
Performance |
| Timeline |
| Target |
| Barnes Noble Education |
Target and Barnes Noble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target and Barnes Noble
The main advantage of trading using opposite Target and Barnes Noble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target position performs unexpectedly, Barnes Noble 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 Barnes Noble will offset losses from the drop in Barnes Noble's long position.| Target vs. Costco Wholesale Corp | Target vs. BJs Wholesale Club | Target vs. Dollar Tree | Target vs. Dollar General |
| Barnes Noble vs. Target | Barnes Noble vs. Lowes Companies | Barnes Noble vs. Kohls Corp | Barnes Noble vs. Walmart |
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 Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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