Correlation Between Winmark and Polished
Can any of the company-specific risk be diversified away by investing in both Winmark and Polished 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 Winmark and Polished into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winmark and Polished, you can compare the effects of market volatilities on Winmark and Polished 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 Winmark with a short position of Polished. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winmark and Polished.
Diversification Opportunities for Winmark and Polished
Weak diversification
The 3 months correlation between Winmark and Polished is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and Polished in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polished and Winmark 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 Winmark are associated (or correlated) with Polished. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polished has no effect on the direction of Winmark i.e., Winmark and Polished go up and down completely randomly.
Pair Corralation between Winmark and Polished
If you would invest 35,151 in Winmark on August 30, 2024 and sell it today you would earn a total of 6,085 from holding Winmark or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Winmark vs. Polished
Performance |
| Timeline |
| Winmark |
| Polished |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Winmark and Polished Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winmark and Polished
The main advantage of trading using opposite Winmark and Polished positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winmark position performs unexpectedly, Polished 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 Polished will offset losses from the drop in Polished's long position.| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
| Polished vs. Sally Beauty Holdings | Polished vs. National Vision Holdings | Polished vs. Big 5 Sporting | Polished vs. Pet Acquisition LLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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