Correlation Between Wayfair and Qurate Retail
Can any of the company-specific risk be diversified away by investing in both Wayfair and Qurate Retail 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 Wayfair and Qurate Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wayfair and Qurate Retail Series, you can compare the effects of market volatilities on Wayfair and Qurate Retail 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 Wayfair with a short position of Qurate Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wayfair and Qurate Retail.
Diversification Opportunities for Wayfair and Qurate Retail
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Wayfair and Qurate is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Wayfair and Qurate Retail Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qurate Retail Series and Wayfair 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 Wayfair are associated (or correlated) with Qurate Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qurate Retail Series has no effect on the direction of Wayfair i.e., Wayfair and Qurate Retail go up and down completely randomly.
Pair Corralation between Wayfair and Qurate Retail
Taking into account the 90-day investment horizon Wayfair is expected to generate 0.59 times more return on investment than Qurate Retail. However, Wayfair is 1.68 times less risky than Qurate Retail. It trades about 0.09 of its potential returns per unit of risk. Qurate Retail Series is currently generating about -0.14 per unit of risk. If you would invest 4,533 in Wayfair on November 9, 2024 and sell it today you would earn a total of 204.00 from holding Wayfair or generate 4.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wayfair vs. Qurate Retail Series
Performance |
| Timeline |
| Wayfair |
| Qurate Retail Series |
Wayfair and Qurate Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wayfair and Qurate Retail
The main advantage of trading using opposite Wayfair and Qurate Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayfair position performs unexpectedly, Qurate Retail 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 Qurate Retail will offset losses from the drop in Qurate Retail's long position.The idea behind Wayfair and Qurate Retail Series pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Qurate Retail vs. Qurate Retail | Qurate Retail vs. Newegg Commerce | Qurate Retail vs. Kidpik Corp | Qurate Retail vs. Natural Health Trend |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |