Correlation Between Winmark and School Specialty
Can any of the company-specific risk be diversified away by investing in both Winmark and School Specialty 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 School Specialty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Winmark and School Specialty, you can compare the effects of market volatilities on Winmark and School Specialty 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 School Specialty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Winmark and School Specialty.
Diversification Opportunities for Winmark and School Specialty
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Winmark and School is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Winmark and School Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on School Specialty 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 School Specialty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of School Specialty has no effect on the direction of Winmark i.e., Winmark and School Specialty go up and down completely randomly.
Pair Corralation between Winmark and School Specialty
Given the investment horizon of 90 days Winmark is expected to generate 13.21 times less return on investment than School Specialty. But when comparing it to its historical volatility, Winmark is 24.56 times less risky than School Specialty. It trades about 0.07 of its potential returns per unit of risk. School Specialty is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.02 in School Specialty on August 27, 2024 and sell it today you would lose (0.01) from holding School Specialty or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Winmark vs. School Specialty
Performance |
| Timeline |
| Winmark |
| School Specialty |
Winmark and School Specialty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Winmark and School Specialty
The main advantage of trading using opposite Winmark and School Specialty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Winmark position performs unexpectedly, School Specialty 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 School Specialty will offset losses from the drop in School Specialty's long position.| Winmark vs. Mesa Laboratories | Winmark vs. Utah Medical Products | Winmark vs. Weyco Group | Winmark vs. Diamond Hill Investment |
| School Specialty vs. FitLife Brands, Common | School Specialty vs. HUMANA INC | School Specialty vs. SCOR PK | School Specialty vs. Aquagold International |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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