Correlation Between Triad Group and Bath Body
Can any of the company-specific risk be diversified away by investing in both Triad Group 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 Triad Group and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and Bath Body Works, you can compare the effects of market volatilities on Triad Group 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 Triad Group with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Bath Body.
Diversification Opportunities for Triad Group and Bath Body
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triad and Bath is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC 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 Triad Group 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 Triad Group PLC 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 Triad Group i.e., Triad Group and Bath Body go up and down completely randomly.
Pair Corralation between Triad Group and Bath Body
Assuming the 90 days trading horizon Triad Group PLC is expected to under-perform the Bath Body. But the stock apears to be less risky and, when comparing its historical volatility, Triad Group PLC is 1.98 times less risky than Bath Body. The stock trades about -0.5 of its potential returns per unit of risk. The Bath Body Works is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 3,590 in Bath Body Works on September 24, 2024 and sell it today you would earn a total of 352.00 from holding Bath Body Works or generate 9.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triad Group PLC vs. Bath Body Works
Performance |
| Timeline |
| Triad Group PLC |
| Bath Body Works |
Triad Group and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and Bath Body
The main advantage of trading using opposite Triad Group and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group 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.| Triad Group vs. Chocoladefabriken Lindt Spruengli | Triad Group vs. Rockwood Realisation PLC | Triad Group vs. Toyota Motor Corp | Triad Group vs. Johnson Matthey PLC |
| Bath Body vs. Uniper SE | Bath Body vs. Mulberry Group PLC | Bath Body vs. London Security Plc | Bath Body vs. Triad Group PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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