Correlation Between Turning Point and West Red
Can any of the company-specific risk be diversified away by investing in both Turning Point and West Red 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 Turning Point and West Red into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and West Red Lake, you can compare the effects of market volatilities on Turning Point and West Red 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 Turning Point with a short position of West Red. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and West Red.
Diversification Opportunities for Turning Point and West Red
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Turning and West is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and West Red Lake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West Red Lake and Turning Point 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 Turning Point Brands are associated (or correlated) with West Red. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West Red Lake has no effect on the direction of Turning Point i.e., Turning Point and West Red go up and down completely randomly.
Pair Corralation between Turning Point and West Red
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.75 times more return on investment than West Red. However, Turning Point Brands is 1.33 times less risky than West Red. It trades about 0.33 of its potential returns per unit of risk. West Red Lake is currently generating about -0.03 per unit of risk. If you would invest 5,500 in Turning Point Brands on September 13, 2024 and sell it today you would earn a total of 845.00 from holding Turning Point Brands or generate 15.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. West Red Lake
Performance |
| Timeline |
| Turning Point Brands |
| West Red Lake |
Turning Point and West Red Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and West Red
The main advantage of trading using opposite Turning Point and West Red positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, West Red 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 West Red will offset losses from the drop in West Red's long position.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| West Red vs. American Axle Manufacturing | West Red vs. RBC Bearings Incorporated | West Red vs. Toro Co | West Red vs. Brunswick |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |